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Full text of "Economic impact of arts and cultural institutions : case studies in Columbus, Minneapolis/St. Paul, St. Louis, Salt Lake City, San Antonio, Springfield"

leport #15 



iconomic Impact of Arts 
md Cultural Institutions 



:ase Studies in 

olumbus 

inneapolis/St. Paul 

t. Louis 

altLakeCity 

ian Antonio 

pringfield 



National Endowment 
fortheArts 



Research Division 
January 1981 



Economic Impact of Arts and Cultural Institutions 

Case Studies in 
Columbus 

Minneapolis/St. Paul 
St. Louis 
Salt Lake City 
San Antonio 
Springfield 



National Endowmentforthe Arts, Washington, D.C. 



This report is published by the Publishing 
Center for Cultural Resources as part of a 
pilot project supported by the National En- 
dowment for the Arts demonstrating economy 
and efficiency in nonprofit publishing. 
The Publishing Center's planning, production, 
and distribution services are available to 
all cultural and educational groups and or- 
ganizations. For further information, write 
Publishing Center for Cultural Resources, 
625 Broadway, New York City 10012 or tele- 
phone 212/260-2010. 



Library of Congress Cataloging in Publication Data 

Main entry under title: 

Economic impact of arts and cultural 

institutions . 

(National Endowment for the Arts Research 
Division report ; #15) 

Bibliography: p. 

1. Arts — Economic aspects — Middle West — 
Case studies. 2. Arts — Economic aspects — 
Utah — Salt Lake City — Case srudies. 3. Arts — 
Economic aspects — Texas — San Antonio — Case 
studies. I. Series: National Endowment for 
the Arts. Research Division. Research Division 
report ; #15. 

NX507.E26 338 . 4 ' 77 ' 00973 80-28990 
ISBN 0-89062-106-3 



Manufactured in the United States of America 



CONTENTS 



PREFACE 



LIST OF TABLES 7 



INTRODUCTION 



Report organization 9 

The Baltimore pilot project 9 

Role of additional case studies 9 

Study sponsors and participating institutions 9 

Reasons for participation 10 

Study management 10 

Project uses 10 

Data collection 11 

Weighting and estimation issues 12 



I. AN OVERVIEW OF THE SIX-CITY STUDY 15 

Community economic impact analysis 15 

The arts as export earners 17 

Direct economic effects 21 

Influences on direct economic effects 22 

Secondary economic effects 23 

Influences on secondary economic effects 24 

Government revenues and costs 24 

Effects not examined 26 

Policy observations 26 



II. THE COLUMBUS ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 2 9 



III. THE MINNEAPOLIS/ST. PAUL ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 41 



IV. THE ST. LOUIS ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 5 3 



V. THE SALT LAKE CITY ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 6 5 



VI. THE SAN ANTONIO ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 7 7 



VII. THE SPRINGFIELD ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 8 9 



ACKNOWLEDGMENTS 101 



REPORTS IN THE NATIONAL ENDOWMENT FOR THI 
ARTS RESEARCH DIVISION SERIES 103 



Digitized by the Internet Archive 

in 2012 with funding from 

LYRASIS Members and Sloan Foundation 



http://archive.org/details/economicimpactofOOwash 



PREFACE 

The publication of this Research Division 
report culminates a five-year exploration 
of the economic role of arts and cultural 
institutions in urban communities. While 
numerous promising technical approaches to 
this subject were proposed to the Research 
Division, resource constraints restricted 
the efforts to the development and ex- 
tensive application of a single model by 
the Center for Metropolitan Planning and 
Research of The Johns Hopkins University. 
The selected model, using a series of equa- 
tions adapted from a previous study of ed- 
ucational institutions, was first applied 
to six institutions in metropolitan Balti- 
more. Results were published in Research 
D ivision Report #6, Economic Impact of Arts 
and Cultural Institutions: A Model for As~ 
sessment and a Case Study in Baltimore 
(see list at the back of this report) . 



The objective of the six additional case 
studies reported here was to permit exam- 
ination of such local factors as city size 
and regional importance on estimated eco- 
nomic effects. Recognition of these fac- 
tors is a necessary step to appropriate use 
of cultural impact data in policy making 
and planning for economic development. 

Few research efforts in the arts and cul- 
ture have combined the energies of as many 
individuals and organizations as this six- 
city study which was carried out through 
the assistance of local project sponsors. The 
extensive listing of each participating 
institution's staff and volunteers that 
appea-rs at the end of this publication only 
begins to suggest the degree of local in- 
volvement. For the Johns Hopkins Univer- 
sity, Center for Metropolitan Planning and 
Research, David Cwi served as principal in- • 
vestigator and provided much of the analy- 
tical material summarized in this report. The 
project manager was D. Alden Smith. David 
Greytak of Syracuse University assisted the 
Center by developing co-efficients used to 
estimate secondary economic effects. Assis- 
ting with computer programming and data base 
management were Mark Keintz and Brian Peters. 
The audience study sampling design and se- 
lected portions of the analysis were the 
work of Ralph B. Taylor. Technical assis- 
tance in design and analysis were provided 
by Allen Goodman and Henry Henderson, while 
Patty Strott served as project secretary. 
The project work was guided by an advisory 
committee that aided in the selection of 
the six study cities from a field of seventy- 
five. Members of the committee were Jim- 
Gasser, The U.S. Conference of Mayors; Bette 
Treadwell, National League of Cities; Joan 
Simmons, National Governors' Conference; 
Ken Kahn , National Assembly of State Arts 



Agencies; and John Blaine, National Assem- 
bly of Community Arts Agencies. Individ- 
uals whose previous or parallel work con- 
tributed to the conceptual framework of the 
project are cited throughout the text. 

This publication presents the procedures, 
findings, and implications of the six-city 
study in summary form. Full project docu- 
mentation is contained in unpublished reports 
and monographs which may be examined at or 
obtained on interlibrary loan from the library 
of the National Endowment for the Arts, 2401 
E Street, N.W. , Washington, D.C. 20506; tele- 
phone 202/634-7640. 

Cwi, David. The Economic Impact of Forty - 
Nine Cultural Institutions on the Economies 
of Six U.S. Cities , unpublished report. 
(Baltimore: The Johns Hopkins University, 
Center for Metropolitan Planning and Re- 
search, 1980) . 

. The Economic Impact of Six Cul - 
tural Institutions on the Economy of the 
Columbus SMSA , volume I; Technical Supple - 
ment , volumes II and III; unpublished re- 
ports. (Baltimore: The Johns Hopkins 
University, Center for Metropolitan Plan- 
ning and Research, 19 80) . 

" . The Economic Impact of Ten Cul- 



tural Institutions on the Economy of the 
Minneapolis/St. Paul SMSA , volume I; Tech - 
nical Supplement , volumes II and III; un- 
published reports. (Baltimore: The Johns 
Hopkins University, Center for Metropolitan 
Planning and Research, 1980) . 

The Economic Impact of Eiaht Cul- 



tural Institutions on the Economy of the 
St. Louis SMSA , volume I ; Technical Supple - 
ment , volumes II and III; unpublished re- 
ports. (Baltimore: The Johns Hopkins 
University, Center for Metropolitan Plan- 
ning and Research, 1980) . 

The Economic Impact of Five Cul- 



tural Institutions on the Economy of the 
San Antonio SMSA , volume I; Technical Sup - 
plement , volumes II and III; unpublished 
reports. (Baltimore: The Johns Hopkins 
University, Center for Metropolitan Plan- 
ning and Research, 1980). 

The Economic Impact of Ten Cul- 



tural Institutions on the Economy of the 
Salt Lake City SMSA , volume I; Technical 
Supplement , volumes II and III; unpublished 
reports. (Baltimore: The Johns Hopkins 
University, Center for Metropolitan Plan- 
ning and Research, 1980). 

The Economic Imaact of Ten Cul- 



tural Institutions on the Economy of the 
Springfield SMSA , volume I; Technical Sup - 
plement , volumes II and III; unpublished 
reports. (Baltimore: The Johns Hookins 



University, Center for Metropolitan Plan- 
ning and Research, 1980). 

Greytak, David, and Blackley, Dixie. Multi - 
plier Analysis: Arts and Cultural Institu - 
tions , unpublished monograph. (Syracuse: 
The Maxwell School, Syracuse University, 
1980) . 

Smith, D. Alden. "The Systematic Sampling 
of Parties at Arts and Cultural Events: 
Weighting Procedures for Party-Specific 
Items." (Baltimore: The Johns Hopkins 
University, Center for Metropolitan Plan- 
ning and Research, 1980) . 

Taylor, Ralph B. Arts Economic Impact Stud - 
ies: An Examination of Some Process Issues , 
unpublished monograpn. (Baltimore: The 
Johns Hopkins University, Center for Metro- 
politan Planning and Research, 1980) . 

Research Division 

National Endowment for the Arts 

January 1981 



LIST OF TABLES 



1-1 
1-2 

1-3 

1-4 

1-5 



II-l 
II-2 

II-3 

II-4 

II-5 

II-6 
II-7 ' 

II-8 

::i-9 



Audience per capita spending 19 

Direct economic effects of 
examined institutions 20 



Government revenues as a percentage 
of examined instititions ' operating 
budgets 23 

Secondary economic effects of 
examined institutions 24 

Estimated revenues and costs to 
local government related to examined 
institutions by city 25 



Columbus SMSA demographics 



30 



ru-i 



rn-2 



III-3 



rn-4 



Columbus SMSA selected businesses 
related to arts and culture 32 

Columbus SMSA estimated direct 
economic effects of examined 
institutions 33 

Columbus SMSA estimated audiences 
and spending by examined 
institutions 34 

Columbus SMSA audiences of 
examined institutions by 
residence and spending 36 

Columbus SMSA nonlocal audiences 
by examined institutions 37 

Columbus SMSA estimated secondary 
economic effects of examined 
institutions 38 

Columbus SMSA examined institutions 
by sources of government support 39 

Columbus SMSA estimated revenues 
and costs to local government 
related to examined institutions 40 



Minneapolis/St. Paul SMSA 
demographics 4 2 

Minneapolis/St. Paul SMSA selected 
businesses related to arts and 
culture 44 

Minneapolis/St. Paul SMSA 
estimated direct economic effects 
of examined institutions 45 

Minneapolis/St. Paul SMSA 
estimated audiences and spending 
by examined institutions 46 



III-5 



rii-6 



III-7 



III-'I 



rn-9 



rv-i 

IV-2 

IV-3 

IV-4 
IV- 5 

IV-6 

IV-7 

IV- 8 ■ 
IV-9 



V-l 
7-2 

V-3 

V-4 



Minneapolis/St. Paul SMSA audiences 
of examined institutions by 
residence and spending 48 

Minneapolis/St. Paul SMSA 
nonlocal audiences by 
examined institutions 49 

Minneapolis/St. Paul SMSA estimated 
secondary economic effects of 
examined institutions 50 

Minneapolis/St. Paul SMSA examined 
institutions by sources of 
government support 51 

Minneapolis/St. Paul SMSA estimated 
revenues and costs to local 
government related to examined 
institutions 52 



St. Louis SMSA demographics 



54 



St. Louis SMSA selected businesses 
related to arts and culture 56 

St. Louis SMSA estimated direct 
economic effects of examined 
institutions 57 

St. Louis SMSA estimated audiences 
and spending by examined 
institutions 58 

St. Louis SMSA audiences of 
examined institutions by 
residence and spending 60 

St. Louis SMSA nonlocal audiences 
by examined institutions 61 

St. Louis SMSA estimated secondary 
economic effects of examined 
institutions 62 

St. Louis SMSA examined institutions 
by sources of government support 63 

St. Louis SMSA estimated revenues 
and costs to local government 
related to examined institutions 64 



Salt Lake City SMSA demographics 66 

Salt Lake City SMSA selected 
businesses related to arts and 
culture 68 

Salt Lake City SMSA estimated 
direct economic effects of examined 
institutions 69 

Salt Lake City SMSA estimated 
audiences and spending by examined 
institutions 70 



V-5 Salt Lake City SMSA audiences of 
examined institutions by 
residence and spending 72 

V-6 Salt Lake City SMSA nonlocal 
audiences by examined 
institutions 73 

V-7 Salt Lake City SMSA estimated 
secondary economic effects of 
examined institutions 74 

V-3 Salt Lake City SMSA examined 
institutions by sources of 
government support 7 5 

V-9 Salt Lake City SMSA estimated 
revenues and costs to local 
government related to examined 
institutions 76 



VI-1 San Antonio SMSA demographics 

VI-2 San Antonio SMSA selected 
businesses related to arts 
and culture 80 



VII-4 Springfield SMSA estimated 
audiences and spending by 
examined institutions 94 

VII-5 Springfield SMSA audiences of 
examined institutions by 
residence and spending 96 

VII-6 Springfield SMSA nonlocal audiences 
by examined institutions 97 

VII-7 Springfield SMSA estimated 
secondary economic effects 
of examined institutions 98 

VII-8 Springfield SMSA examined 
institutions by sources of 
government support 9 9 

VII-9 Springfield SMSA estimated 
revenues and costs to local 
government related to examined 
institutions 100 



VI-3 San Antonio SMSA estimated direct 
economic effects of examined 
institutions 81 

VT-4 San Antonio SMSA estimated 
audiences and spending by 
examined institutions 82 

VI-5 San Antonio SMSA audiences of 
examined institutions by 
residence and spending 84 

VI-6 San Antonio SMSA nonlocal audiences 
by examined institutions 85 

VI-7 San Antonio SMSA estimated 
secondary economic effects 
of examined institutions 86 

VI- 8 San Antonio . SMSA examined 
institutions by sources of 
government support 87 

VI-9 San Antonio SMSA estimated 
revenues and costs to local 
government related to examined 
institutions 88 



VII-1 Springfield SMSA demographics 

VII-2 Springfield SMSA selected 
businesses related to arts 
and culture 9 2 



90 



VII-3 Springfield SMSA estimated direct 
economic effects of examined 
institutions 93 



INTRODUCTION 



Report organization 

This report examines the economic impact 
of cultural institutions on their commu- 
nities. An approach developed in a pilot 
project in Baltimore in 1976 has been 
applied to follow-up studies in six other 
U.S. cities. The findings are presented 
here in summary form. 

Chapter I of the report presents an over- 
view of the six-city study, describing 
technical matters of procedures and data 
collection, and discusses traditional 
approaches to community economic analysis 
including the interindustry analysis used 
here. Audience spending is examined, 
especially in regard to the study's re- 
strictive protocol which attributes to 
the institution only those expenditures 
made by visitors who came to the commun- 
ity for the sole reason of using the in- 
stitution. The chapter reviews direct 
and secondary effects of culture-related 
expenditures . 

Succeeding chapters examine the applica- 
tion of economic impact analysis in the 
six cities of the study: Columbus, Minne- 
apolis/St. Paul, St. Louis, Salt Lake City, 
San Antonio, and Springfield, Illinois. 
Each city is described in terms of its 
institutions, economy, and broader cul- 
tural community, direct and secondary 
economic effects of selected institutions, 
and institution-related government reve- 
nues and expenditures. 

The Baltimore pilot project 

The city studies presented here are a con- 
tinuation of a pilot project conducted in 
Baltimore ( Research Division Report #6 , 
Economic Impact of Arts and Cultural Insti - 
tutions: A Model for Assessment and a Case 
Study in Baltimore , Washington: National 
Endowment for the Arts, 1977; see list at 
the back of this report) . This project 
sought to develop an approach to conducting 
useful and credible cultural economic im- 
pact studies consistent with the cultural 
field's resource constraints. The adopted 
approach was based on • J . Caffrey and H. 
Isaacs 's Estimating the Impact of a College 
or University on the Local Economy (Wash- 
ington: American Council on Education, 
1971) . 

In the Baltimore report, David Cwi and 
Katherine Lyall sought to improve on the 
clarity and scope of cultural economic 
impact analysis by clearly distinguishing 
effects on local business volume and ex- 
penditures, costs and revenues to govern- 
ment, and effects on personal income and 



jobs. Needed data were acquired through 
available institutional internal accounts , 
audience and employee surveys , and local , 
state, and federal documents. 

The study focused on the Baltimore Opera, 
the Walters Art Gallery, the Baltimore 
Symphony, the Morris A. Mechanic Theatre, 
the Baltimore City Ballet, the Baltimore 
Museum of Art, Center Stage, and the Arena 
Players. In fiscal 1976 the examined in- 
stitutions and their employee households 
spent $6.8 million in the Baltimore U.S. 
Bureau of the Census Standard Metropolitan 
Statistical Area or SMSA; their audiences 
and patrons spent an additional $4 . 6 mil- 
lion in association with their attendance; 
and their guest artists spent an addition- 
al $68,000. These institution-related 
expenditures prompted secondary effects 
as local businesses that benefited made 
additional local purchases. These addi- 
tional purchases were estimated to eventu- 
ally total $18.5 million. In addition, 
local governments in the Baltimore SMSA 
incurred some $700,000 in expenditures 
required to provide services to the in- 
stitutions' employee households. While 
tax-exempt themselves, the institutions 
accounted for at least $150,000 in local 
tax revenues from such sources as retail 
sales, income, and property taxes. It 
was estimated that the total of institu- 
tion-related spending would support some 
770 local jobs in addition to the 404 
provided by the institutions themselves. 

Role of additional case studies 

While the Baltimore pilot project served 
to identify and refine research and ana- 
lytical approaches, it did not attempt to 
assess the role and relative importance 
of cultural activities to the local eco- 
nomic development process. It was hoped 
that additional' studies would lead to 
a better understanding of the similarities 
and, differences among institutions of var- 
ious types and permit analysis of the eco- 
nomic development role of cultural insti- 
tutions. Toward these ends, data were 
analyzed utilizing traditional concepts 
of community economic analysis. 

Study sponsors and participating institutions 

To identify cities interested in conduct- 
ing an economic impact case study utiliz- 
ing the procedures piloted in Baltimore, 
letters were sent to local and state arts 
agencies and announcements were placed in 
cultural publications. This prompted in- 
terest from some seventy cities and insti- 
tutions. Approximately twenty continued 
their interest after understanding the ef- 
fort required. The six participating 
cities were selected from this group with 
the assistance of a national advisory com- 



mittee. The resulting case studies have 
already been released in each participat- 
ing city, along with technical supplements 
reviewing study procedures and presenting 
the data on audience, institutions, and 
staff used to estimate economic effects. 

Sponsors included a state arts council, a 
united arts fund, an arts alliance, and two 
nonprofit arts councils. The demands im- 
posed by data collection methods, espe- 
cially the need to conduct simultaneous 
audience studies over several weeks, sharp- 
ly limited the number of institutions that 
could be included in each of the six cities 
of the study. Conseguently , the arts and 
cultural organizations' data in each city 
are best thought of as an illustrative 
cross section rather than as a probability 
sample. 

Art museums and symphonies were examined 
in all six cities; theatres in five; mu- 
seums of science and art centers in four; 
performing arts, modern dance, ballet, and 
opera companies in three; museums of history 
in two; and a chamber orchestra in one. 

Reasons for participation 

Interviews with local study sponsors sug- 
gested that an interest in "ammunition for 
advocacy" was a primary motivation for 
participating in the study; they hoped al- 
so that the study would prove that there 
were economic returns on public and pri- 
vate cultural funding. Sponsors hoped to 
influence foundation as well as legisla- 
tive decisions, and their interest in ad- 
vocacy included enhancing the "competi- 
tiveness" of their constituency. 

Sponsors indicated that three main bene- 
fits influenced participation by local in- 
stitutions. First, the sponsor retained 
complete administrative and financial re- 
sponsibility; second, the institutions re- 
ceived an audience survey; and third, the 
institutions understood the study's ad- 
vocacy potential, including the fact that 
the project was a national study involving 
The Johns Hopkins University and the Na- 
tional Endomwent for the Arts, and that it 
would reach a wide audience of cultural 
administrators . 

Results of interviews and a questionnaire 
survey of cultural administrators and com- 
munity leaders in the six cities indicated 
little agreement on the level of anticipa- 
ted value of the studies in any area but 
advocacy. These individuals were asked to 
report the areas in which they thought the 
study would prove useful, some of which 
were: long-range planning by local and 
state arts councils; municipal budget al- 
locations; events sponsored by local arts 
institutions; management of institutions; 



improving publicity to promote tourism; 
interest in culture by municipal tourist- 
development agencies ; and making people 
more aware of the needs of their local 
cultural institutions. 

Cultural administrators cited secondary 
benefits to their organizations consistent 
with an advocacy focus. In particular, 
their interests lay in enhancing visibil- 
ity and prestige, and increasing support 
from corporations and government. 

The community leaders generally believed 
that the study would lead to increased 
budget allocations. Details of question- 
naire procedures and findings are discussed 
in Ralph B. Taylor's Arts Economic Impact 
Studies: An Examination of Some Process 
Issues (unpublished monograph, Baltimore : 
The John Hopkins University, Center for 
Metropolitan Planning and Research, 1980). 
This monograph also explore changes in ex- 
pectations after completion of the study. 

Study management 

As already noted, the six case studies re- 
viewed in this report were developed in 
partnership with local sponsors and each 
was responsible for the local data collec- 
tion following procedures developed at The 
John Hopkins University, Center for Metro- 
politan Planning and Research. Study co- 
ordinators selected by the local sponsors 
varied in background and included a grad- 
uate student intern, a private consultant, 
institution staff, and a professor at a 
local university. 



Coordinators from each city pa 
in workshops held in Baltimore 
Hopkins in October 1978. Thes 
were developed to orient study 
tors to all phases of the data 
process. Supplemental materia 
conduct or documentation of ea 
lection procedure were develop 
warded as procedures were impl 



rticipated 

at Johns 
e workshops 
coordina- 
collection 
Is regarding 
ch data col- 
ed and for- 
emented. 



The ability of cities to undertake these 
tasks simultaneously was materially affected 
by constraints in study coordinator time, 
the ongoing availability of other local 
study staff, and cooperation from local in- 
stitutions. In the interest of data quality, 
only data collection efforts that could be 
successfully managed by local study staff 
were encouraged. Because at any one time 
the cities may have been engaged in differ- 
ing aspects of the data collection effort, 
constant monitoring by telephone of progress 
and problems was necessary. 

Project uses 

The primary purpose of arts and cultural 
institutions is to add to creative expres- 



10 



sion and quality of life, and not to gen- 
erate dollars and jobs for the community. 
To substitute the economic value of the 
arts for their human, spiritual, and aes- 
thetic value could be dangerous. The eco- 
nomic value of the arts should be viewed 
as a by-product and not the primary rea- 
son for their existence. It would be a 
serious and self-defeating mistake for in- 
stitutions to make artistic decisions on 
the basis of potential economic impact. 



However, because culture compe 
activities in the city for f ina 
and because the cost of arts 
risen, institutions wish to p 
arts benefit the community ec 
Economic impact studies show 
flows between the arts and th 
my. They demonstrate that th 
and economic development of a 
can be complementary. 



tes with other 
ncial support , 
support has 
rove that the 
onomically . 
how money 
e local econo- 
e cultural 
community 



Arts and cultural economic impact studies 
also can be used to influence resource al- 
locations from government and private 
sources. During a 1977 National Endowment 
for the Arts workshop, it was noted that 
"in the competition for public dollars, 
economic impact information was what leg- 
islators 'listened to.' By having this 
information available, legislators would 
find it easier to justify arts appropria- 
tions . . . . " (David Cwi, ed., Research 
in the Arts: Proceedings of the Confer - 
ence in Policy-Related Studies of the Na - 
tional Endowment for the Arts , Baltimore: 
Walter Arts Gallery, 1977) . The arts re- 
turn a portion of public funds, and also 
generate economic benefits throughout the 
community. Economic impact studies can 
tell business owners that they are invest- 
ing wisely. They are an effective con- 
sciousness-raising tool, because they alert 
government, business, foundations, and the 
general community to the arts. The arts 
can gain a competitive advantage for in- 
creasingly hard-to-get funding by partici- 
pating in the studies. 

More specifically, economic impact studies 
can affect the following areas of advocacy 
and community planning. They can help to 
preserve and increase local and state art 
budgets, promote tourism, and assist in 
long-range planning by local and state 
arts councils. They may interest local 
tourist development agencies in the arts, 
provide a basis for approaching economic 
development organizations, and assist 
businesses (restaurants, tour operations, 
vendors, etc.) in appraising their poten- 
tial markets. 

Economic impact studies are also useful 
for internal policy analysis and forecast- 
ing. Organizations may learn more about 
their operations and markets. They may 



want to change programs to attract addi- 
tional audiences. A museum, for example, 
may be able to save money by learning more 
about its attendance — it may be able to 
decrease the number of days it operates 
and increase its hours of operation on 
other days without significantly affecting 
its drawing power. Using study data, in- 
stitutions may find they can make better 
use of their limited resources. 

Obviously, a local organization or agency 
c-nsidering the initiation of an extensive 
economic impact study should weigh the 
costs in light of anticipated uses. Where 
the production of advocacy material is a 
main objective, general observations drawn 
from this and other economic impact studies 
may be adequate. For such purposes, par- 
ticular attention should be paid to the 
"simple indicators" of economic effects 
presented in Chapter I. 

Culture and central cities . Although these 
studies are intended to identify effects on 
entire U.S. Bureau of the Census Standard 
Metropolitan Statistical Areas or SMSAs , 
economic development practitioners in cen- 
tral cities may have a special interest in 
their findings. The examined events and 
facilities were typically lpcated in the 
central city. In addition to visitors from 
outside the SMSA, these activities regularly 
bring thousands of suburban residents back 
to the city and can help draw people to re- 
developed downtown and neighborhood areas. 
This may help maintain markets for other 
city businesses and create an urban envi- 
ronment attractive to residents and visitors 
alike. The study documents cited in the 
preface offer detailed data on audience 
residence and distance traveled to attend 
cultural institutions. 

Data collection 

To assess the local economic effects of arts 
and cultural institutions , each institution's 
direct effect in terms of local spending for 
goods and services was first identified, to- 
gether with salaries and wages to local res- 
idents and local spending by guest artists 
and audiences. These and other data were 
then used to estimate secondary effects in- 
volving local businesses and government. 
Required data on audience spending were ac- 
quired through extensive audience surveys 
during the fall and winter of 1979. 



Audience survey. The audience 
quired the development of self- 
ed questionnaires, implementati 
dures and management plans, and 
frames, documentation, and dat 
procedures relating to editing 
punching. Audience questionnai 
cedures reflected the Baltimore 
ject and were designed to allow 
to add questions. 



survey re- 
administer- 
on proce- 
sampling 
a handling 
and key- 
res and pro- 
pilot pro- 
each city 



11 



During the survey period, attenders at 
the arts and cultural institutions were 
given questionnaires. The form, after 
identifying the study sponsors, explaining 
its purpose, and promising anonymity to 
participants, posed a number of compound 
questions. The first set concerned place 
of residence and length of time there, age, 
number of people in the household, and years 
of education of the respondent; also, how 
far the respondent had come to use the in- 
stitution, and how much admission had been 
paid. The next questions concerned the 
party with which the respondent had come: 
how many in the party; had they spent any 
money in connection with coming, such as 
transportation, refreshments outside the 
institution, refreshments or purchases 
inside the institution; or expenses for 
such matters as babysitting and parking? 

The third group of questions singled out 
visitors from out of town: had they come 
expecting to attend the institution, and 
if so was attendance the sole reason for 
the visit; how many nights would they 
spend in town; how many in their party, 
and how much did the party expect to spend 
during this visit? 

The questions that followed explored the 
respondent's use and support of examined 
cultural activities. The respondent was 
asked, for each of the examined insti- 
tutions: was he or she a member or sub- 
scriber; how many times the respondent had 
attended in the -last twelve months, and 
how much money had been contributed to the 
institution in that period over and above 
memberships, tickets, and other fees; how 
much had been contributed in that period 
by the respondent to combined arts and 
cultural fund-raising campaigns in the 
relevant city. 

The final questions were demographic: mar- 
ital status, sex, race or ethnic group, 
total family income in the last year, em- 
ployment status, and occupation. 

Prior to the orientation workshop, study 
coordinators gathered requisite audience 
data for each event or day during the sur- 
vey period, such as estimated attendance 
by performance or event. 

Separate technical supplements for each 
city study (available through the library 
of the National Endowment for the Arts) 
identify sampled event days for each in- 
stitution and present information on re- 
sponse rates. Response rates of 70 percent 
and higher were common in all cities , with 
surveys designed to obtain a minimum of 
five hundred completed audience question- 
naires at each institution. 



Institutional data inventory. Coordina- 
tors were proveded with suggested proce- 
dures for securing requisite data from in- 
stitutional internal financial accounts. 
These procedures sought to be responsive 
to institutional unwillingness to "open 
the books" for inspection and at the same 
time sought to gather data of sufficient 
quality for study purposes. A principal 
concern was to identify nonlabor expendi- 
tures made with local firms. 



To determine 
tors identif 
examined inst 
about local v 
and sought th 
statement of 
tifying which 
cally. Invoi 
plementary me 



local expenditures, coordina- 
ed the staff person at the 
itution most knowledgeable 
endors and accounts payable, 
e most detailed available 
institutional expenses iden- 

expenditures were made lo- 
ces were inspected as a sup- 
asure where necessary. 



Additional data on attendance, staffing, 
and other matters were provided in this 
institutional data inventory, as well as 
counts by a random number table to select 
bank account balance dates. 

Community data inventory . Study coordina- 
tors were oriented to requisite community 
data and likely local sources, and were 
provided with an Annotated Community Data 
Inventory intended to take account of the 
unique features of each community. Subse- 
quently, the documented community data 
items were sent to local planning agencies 
and chambers of commerce for review. Johns 
Hopkins staff gathered specific data on 
each city's economy, business, and employ- 
ment. 



Government data. 



To complete the relevant 



data, study staff collected information on 
governmental expenditures on all levels in 
the SMSA, together with tax rates and ba- 
ses for local jurisdictions. 

Weighting and estimation issues 

The data collection procedures prompted 
the need to deal with weighting and es- 
timation issues. 

Audiences . The systematic sampling of an 
audience necessitates weighting the number 
of respondents of differing party-sizes 
due to the differing probabilities of va- 
rious size parties receiving question- 
naires. A detailed description of this 
procedure and caveats regarding its use 
are in a Johns Hopkins University working 
paper by D. Alden Smith, "The Systematic 
Sampling of Parties at Arts and Cultural 
Events : Weighting Procedures for Party- 
Specific Items," (Baltimore: Center for 
Metropolitan Planning and Research, 1980). 



12 



Any analysis of visitors must deal with a 
limited number of cases or small percent- 
age of visitors in the audience on the 
dates surveyed. These circumstances ad- 
vised an analysis of visitor mean spend- 
ing across all sampled institutions rather 
than on an institutional basis. Further- 
more, since some institutions had rel- 
atively few visitors outside the SMSA 
during the sampling period, estimates of 
total sole-reason visitors may be based 
on a small number of sampled visitors. 
These institutions are noted in tables in 
individual city chapters. 

Employees . The employee survey used ZIP 
codes to categorize employees into local 
taxing districts that cross political 
boundaries. Part-time employees were 
aggregated into full-time equivalents. 

Estimates of local spending by institu- 
tional employees were based on their per- 
sonal salary and wage income. Costs to 
local government, however, were based on 
employee household data, since the majori- 
ty of these effects are only meaningful 
in terms of households. 

Community taxes . These included taxes on 
business and residential property, sales, 
transit, hotels, parking, gasoline, res- 
taurants, admissions, and income. Study 
procedures focused on institution-related 
sales to vendors- in the SMSA and identi- 
fied property taxes on business-related 
property or inventory on an SMSA basis. 
Consequently, the estimation of local 
property taxes attributed to the examined 
institutions is complex because select- 
ed taxes can change over time; there may 
be a large number of local taxing authori- 
ties; taxing districts may overlap; data 
such as market value or taxable value 
and assessment ratio may not be readily 
available; and tax policy may differ by 
type of property — business inventories 
may or may not be taxable at a different 
rate than business real property. 

Procedures required the development of an 
aggregate tax rate for all taxing author- 
ities and jurisdictions within a county 
and the weighting of all counties within 
the SMSA. This was accomplished by weight- 
ing for differences in assessment ratios 
and property tax rates. 

Local residential property tax attributa- 
ble to institutional employees owning homes 
can be calculated directly using average 
property tax reported by the full-time em- 
ployees in the employee survey. Property 
taxes due to institutional employees who 
rent living quarters can be estimated on 
the assumptions that 25 percent of rent or 
employee's household income goes to rent 



and that 20 percent of rent would eventual- 
ly go to landlord property taxes. 



The calculation of sales taxe 
account of differing tax rate 
transactions by local jurisdi 
aggregate of all institution, 
and guest artist spending sub 
tax is identified and then mu 
the appropriate tax rate. If 
centage of locally generated 
venues is returned to local j 
spending is multiplied by tha 



s must take 
s and taxable 
ctions . The 

audience , 
ject to sales 
ltiplied by 
only a per- 
sales tax re- 
urisdictions , 
t percent. 



Jurisdictions may have differing sales tax 
rates. If so, attributable sales taxes can 
be apportioned by the percent of total 
SMSA sales taxes collected in each juris- 
diction . 

Transit taxes, where applicable, were lev- 
ied in a similar fashion to sales taxes 
and treated similarly for the purposes of 
the study. 

To estimate hotel taxes, first the esti- 
mated number of sole-reason visitors was 
multiplied by the average length of their 
visit. This figure was adjusted by the 
percent reporting spending on lodging (cor- 
rected for party size) to identify the num- 
ber of paid nights in the area. According 
to Laventhol and Horwath ' s "U.S. Lodging 
Industry, 1978," Philadelphia, 1978, the 
average daily rate for occupancy in 1977 
was $15.81 per person. Assuming two per- 
sons per room, this figure was multiplied 
by the number of person nights for the 
estimated dollar value of hotel spending 
by sole-reason visitors. The result, plus 
the spending on hotels by guest artists 
(from the institutional data inventories) , 
provided an estimate of total spending at 
hotels. This amount can be "taxed" at the 
appropriate rate. 



To .estimate par 
party per car, 
cal parties and 
ties was multip 
cent of attende 
figure was mult 
parking cost pe 
stay times aver 
lots) to get th 
government for 



king revenue 
the adjusted 
nonlocal so 
lied by the 
rs arriving 
iplied by th 
r car (avera 
age cost per 
e parking re 
each institu 



s , assuming one 
number of lo- 
le-reason par- 
estimated per- 
by car. This 
e estimated 
ge hours of 

hour in public 
venues to local 
tion. 



Gaso 


line taxes 


wer 


plying the average 


the 


adjusted 


numbe 


reason parties 


to 


This 


• figure 


was 


; th 


twen 


ty miles 


per g 


used 


. Local 


excise 


then 


applied 


. 


No 


oline usage 


by 


the 


empl 


oyees or 


b^ 


- gu 



e estimated by multi- 
distance traveled by 
r of local and sole- 
get total miles traveled, 
en divided by an assumed 
allon to estimate gallons 

taxes per gallon are 
estimate was made of gas- 
examined institutions ' 
est artists. 



13 



Restaurant taxes, where applicable, can be 
calculated directly from estimated spend- 
ing in restaurants and bars, using appro- 
priate local tax rates. 

Data on admission taxes, where applicable, 
were provided by the institutions . 

Income rax estimates frequently involve 
jurisdictional problems as noted previous- 
ly with other tax items. One frequent prob- 
lem is whether the tax is collected where 
the employee lives, works, or in both 
places. Income taxes, where applicable, 
were calculated as described in the Balti- 
more pilot oroject reoort . 



14 



CHAPTER I 



AN OVERVIEW OF THE SIX-CITY STUDY 



Community economic impact analysis 



A brief introduction 
al approaches to the 
of community economic 
ment will provide a t 
from within which to 
of cultural activitie 
as economic enterpris 
This will also assist 
in placing case study 
broader context. 



to several tradition- 
analysis and modeling 

growth and develop- 
raditional framework 
evaluate the impact 
s considered solely 
es in their own right . 
persons interested 
findings within this 



The first approach, Keynesian multipliers, 
focuses on the cascading effect of a dol- 
lar of spending in a community as it is 
respent over and over to generate addition- 
al jobs and income. The second, the eco- 
momic base model approach, focuses on the 
sources of community income, especially 
local firms that generate income through 
exports of goods, services, and labor. 
The third approach, interindustry analysis , 
explains the cascading of income through 
the community in terms of the purchases 
that local firms make from one another and 
the business volume created by employee 
spending. 

Keynesian multipliers . Several cultural 
economic impact studies utilize Keynesian 
multipliers; this method of analysis is 
based on the work of John Maynard Keynes 
and estimates the total impact on the econ- 
omy- of an injection of additional income. 
On the Keynesian model, income is pictured 
as rippling through the economy, being 
spent and respent as it becomes income to 
firms, then wages, then again income to 
firms. Keynesian analysis traces the cas- 
cading effect of a dollar of spending in 
a community by estimating the propensity 
to consume when there is a change in in- 
come. The ratio of the change in consump- 
tion to the change in income is "the- mar- 
ginal propensity to consume." The ratio 
will be less than one since some portion 
of a change of income may not be spent on 
consumption due to such factors as savings 
and taxes. 

Keynesian analysis , when applied to a spe-- 
cific economy, makes it possible to iden- 
tify a marginal propensity to consume 
goods and services that are produced lo- 
cally. Dollars spent on imported goods 
and services are a form of "leakage." Tax- 
es and savings by households and firms are 
additional sources of leakage. 



On the Keynesian model, as income is be- 
ing spent and respent, it is reduced after 
each round by leakage. The total of all 
these successively smaller fractions of 
the original unit of income is an arith- 
metic multiplier that can be estimated 
in terms of personal incomes of local 
business volume. 

Economic base model. The premise of the eco- 



nomic base model 
region or city is 
by its status as 
services, or labo 
not only goods or 
the region but ex 
by nonlocal buyer 
that are specific 
to such factors a 
history. 



is that the growth of a 
principally determined 
an exporter of goods, 
r. Export sales include 
services flowing out of 
penditures in the region 
s of goods and services 

to the community, due 
s geography, climate, or 



The community's export industries are re- 
ferred to as the basic sector of the local 
economy. Employment and income in this 
sector are treated as essentially a func- 
tion of outside demand for the region's 
exports . Since no community is capable 
of producing all the goods and services 
it requires, leakage is inevitable. The 
basic or export sector is important be- 
cause it brings new dollars into the 
community through export sales, providing 
the income the community needs to purchase 
imports and fund local growth. 



Workers in 
the export 
supporting 
and legal s 
personal se 
these servi 
basic secto 
sector are 
basic servi 



export industries as well as 
industries themselves require 
services such as trade, medical 
ervices, and a variety of other 
rvices. The firms providing 
ces are referred to as the non- 
r. Workers in the nonbasic 
themselves consumers of non- 
ces . 



Thus, the theory holds that all economic 
activity is either basic or nonbasic, and 
that local economic growth and stability 
are essentially determined by demand else- 
where in the world for the goods and ser- 
vices that comprise the export or basic 
sector . 

From this point of view', demand in the 
nonbasic sector is dependent on demand 
in the basic sector. If the basic sec- 
tor expands then there is increased in- 
come available to the community allowing 
for expansion of the nonbasic sector. 
Consequently, industries that simply ser- 
vice local needs are not as important as 
those that have a market outside the com- 
munity, unless the local service industry 
is directly linked to an export earner in 
the sense that its absence or shrinkage 
would have negative effects on the export 
sector . 



15 



Thus, a firm may produce a product which 
is sold locally to a manufacturer who 
incorporates it as a part in a final pro- 
duct which is sold outside the community. 
In this technological or production sense 
the firms are linked; both would be con- 
sidered part of the basic sector. An in- 
dustry that has a limited export role 
would be considered relatively unimportant 
from the standpoint of economic base theory 
unless it was tied technologically to ex- 
port earners, especially if residents were 
willing to substitute another locally 
available activity rather than rely on 
imports — attend a local movie theatre 
rather than travel to another city for a 
leisure activity not available locally. 

Various techniques have been used to iden- 
tify the size of a community's basic in- 
dustry and estimate the impact in the non- 
basic sector of basic sector expansion. 
The simplest approach involves the assump- 
tion that all employment in certain cate- 
gories is basic. For example, it is com- 
monly assumed that all manufacturing and 
agricultural production is for export and 
therefore basic, and that all construc- 
tion, trade, and services are nonbasic. 
However, many industries identified as 
basic and nonbasic by this approach will 
be found to have markets both within and 
outside the local community. The chal- 
lenge then is to identify the extent to 
which activity in any one industry is ex- 
port oriented. 

Once the proportion of an industry that 
is basic or nonbasic has been determined, 
it is possible to develop "economic base 
multipliers." By identifying the ratio 
of basic employment (or income) to non- 
basic, it is possible to create a base 
multiplier. If the ratio is 1:2 then the 
base multiplier is three. When basic 
employment increases by one, two other 
jobs will be created in the nonbasic 
sector. 

The significance of the economic .base 
model is clear. In effect it attempts to 
identify firms in the region with a pri- 
marily local market and distinguish them 
from firms which earn income through sales 
outside the metropolitan area. 

Available cultural impact studies tend to 
focus on the export issue by providing data 
on the role of culture in tourist develop- 
ment. This is due in large measure to the 
focus on performing and visual arts insti- 
tutions as opposed, say, to individual 
artists and craftworkers or film and other 
arts industries that incur export sales 
through sales of their products or labor 
in other cities. 

The institutions examined in the case 



studies are thought to predominantly incur 
exoort sales by drawina visitors to the 
community, thereby contributing to tourism 
development . 

Data from the city studies can help iden- 
tify the extent to which the institutions 
are themselves export earners. The case 
studies do not examine the extent to which 
the availability of local cultural acti- 
vities restrict imports, including sales 
that might have gone for leisure, arts, 
and other pursuits outside the community 
had there been no locally available ac- 
tivities . 

Interindustry analysis . The Keynesian 
multiplier and economic base model ap- 
proaches to economic analysis operate on 
two basic concepts: that spending in the 
local economy involves continuous economic 
exchanges between households and firms as 
well as leakage from the economy due to 
imports and other factors. 

The third approach, interindustry analysis , 
examines the economy at a highly disag- 
gregated level, tracing the flow of dol- 
lars at the household and firm level as 
well as linkages among firms that might 
be confusing when expressed solely in 
terms of the economic base model. 

To produce and sell an additional unit of 
output, local firms require a variety of 
resources, including goods, services, and 
labor. This relationship is technologi- 
cal in the sense that the firm's produc- 
tion requirements make it dependent on 
other firms , some of which are local and 
others that are not. 

Direct effects refer to the purchases of 
goods, services, and labor that a firm 
requires to produce an additional unit of 
output. These direct expenditures lead 
to indirect expenditures as suppliers of 
needed goods and services make purchases 
of their own in order to produce the out- 
put for the buying firm. In this way, 
the original sale achieves a multiplier 
effect the size of which will vary by 
industry as a function of its requirements 
for locally available goods, services, 
and labor. Other things being equal, the 
larger and more diversified the economy, 
the more likely the needs can be supplied 
locally, and hence the higher the "multi- 
plier. " 

Interindustry analysis addresses the 
"linked" industry issue by distinguishing 
technologically linked enterprises from 
industries linked through employee house- 
holds. Firms devote a portion of their 
business volume to purchasing the goods 
and services they need from other busi- 
nesses. Households receive a portion of 



16 



these sales revenues as wages. Local 
spending by households creates additional 
demand that also results in indirect ef- 
fects among local firms. The business 
volume created by the production require- 
ments of technologically linked firms — 
indirect demand — can be distinguished 
from the "induced" demand created by 
wages to their employees that are spent 
locally. 



If a drugstore is the 
household demand by a 
steel industry, this i 
"induced" demand. It 
effect of steel produc 
"output" of the drugst 
in the process of maki 
The essential fact to 
industries are only cr 
duced demand created by 



beneficiary of 
wage earner in the 
s treated as an 
is not an "indirect" 
tion because the 
ore is not required 
ng and selling steel . 
bear in mind is that 
edited with the in- 
their own wage bill . 



Since labor is an input to the production 
nrocess , it is possible to use interindus- 
try or input-output analysis not only to 
identify total local business volume asso- 
ciated with a sale in any one industry, but 
to estimate as well total jobs and sala- 
ries in the other business sectors bene- 
fiting from this activity. These salaries 
represent income from sales received by 
each firm's employees. Total business 
volume is then the sum of indirect trans- 
actions among firms and the induced local 
business activity prompted by waaes respent 
locally by their employees. 

As part of the six-city study, coefficients 
based on input-output analysis were used 
to estimate the indirect and induced busi- 
ness" volume associated with the fiscal 
1978 local expenditures of the examined 
institutions , their staff households, and 
audiences. This approach is based on pro- 
cedures especially commissioned for this 
project, reported by David Greytak and 
Dixie Blackley, in. "Multiplier Analysis: 
Arts and Cultural Institutions'' (unpub- 
lished monograph, The Maxwell School, Syr- 
acuse University, 1980). The component of 
this business volume devoted to salaries 
was also identified. Indirect and induced 
business volume are simply called second- 
ary business volume for the purposes of 
this study. Since secondary wages reDre- 
sent the portion of secondary business vol- 
ume paid to local households as wages, the 
two can be identified separately but are 
not additive. Included among secondary ef- 
fects are the costs and revenues to local 
government. 

The arts as export earners 

In discussing the role of the arts as a 
tourist industry, Dick Netzer has stated 
the issue in this way: r . . .the arts can be 
a significant export earner bv beinrr an 



important factor in attracting tourists , 
conventions and other business visitors. I 
stress 'important factor' for it is quite 
improper to ascribe to the arts the econo- 
mic benefits of visitors who in reality 
are attracted by entirely different attri- 
butes of the urban area — gambling in Las 
Vegas, the centrality of Chicago, the 
beauty and sparkling ambience of San Fran- 
cisco, the monumental structures and gov- 
ernment activity in Washington, the busi- 
ness opportunities of Houston and the Twin 
Cities — and happen to visit a museum or go 
to the theater. For the arts themselves 
to be a powerful attractive factor, they 
must offer a concentration that is large, 
diverse and quite unlike the arts available 
in dozens of other places. And, by this 
standard, only New York and Los Angeles 
rate; in other cities, only negligible frac- 
tions of the visitors come largely because 
of the arts as such." ( A National Confer - 
ence on the Role of the Arts in Urban Econ - 
o mic Development , The Minneapolis Arts 
Commission, 1978, unpublished remarks). 



Netzer emphas 
the princioal 
residents, th 
are not expor 
be too restri 
port sales to 
proach has pol 
attention on 
as ODOosed to 



ized that if culture is not 

factor in attracting non- 
en any sales to these visitors 
t sales. This criterion may 
ctive as a description of ex- 

the arts. However, the ap- 
icy utility because it focuses 
the drawing power of the arts 
simply their sales to tourists. 



It may be proper to attribute economic 
benefits to the arts and cultural institu- 
tions even if their audience was drawn to 
the community for noncultural reasons. 
These persons may have incurred an admis- 
sion cost representing money that would 
not have spent locally at all if it had 
not been spent on the arts. For these 
visitors, culture is not a substitute for 
some other equally attractive local activ- 
ity. Further, even when not solely res- 
ponsible for tourist visits, the avail- 
ability of arts and cultural activities 
may act as an additional inducement to 
visit, perhaps increasing the number of 
visits or length of stay. In these circum- 
stances, the availability of culture acts 
as an additional inducement to visit, 
allowing for other local sales as well. 

The accurate description of arts export 
sales aside, the essential oolicy question 
is whether the arts create a market by 
drawing visitors to the community or re- 
spond to a visitor market created by other 
community advantages. 

Restrictive protocol . Audience spending 
estimates were based, as in some other eco- 
nomic impact studies , on an analysis of 
self-administered questionnaires asking the 
respondent to report actual or planned ex- 



17 



oenditures in several general categories — 
restaurant, bar, hotel, motel, and public 
transportation. Other studies have attrib- 
uted to cultural institutions the spending 
of all visitors in their audiences inclu- 
ding those in the city fcr reasons other 
than cultural attendance. This study, how- 
ever, adopted a protocol which limited 
visitor spending that might be credited as 
an impact of culture. 

For the purpose of this analysis , all vis- 
itor admission payments to institutions 
were counted inasmuch as they are income 
to the institution. However, it seems 
inappropriate to attribute to the arts and 
cultural institutions the ancillary spend- 
ina of visitors who are in the community 
for noncultural reasons but, once there, 
decide to use the available culture. City 
studies therefore attribute to the arts 
and cultural institutions the ancillary 
spending of visitors who report that they 
were drawn to the community solely because 
of their interest in one of the examined 
cultural activities. 

This protocol may be viewed as conserva- 
tive. It does not, for example, credit 
arts and cultural institutions with the 
ancillary expenditures of persons who ex- 
pected to attend although this was not the 
sole reason for the visit. 

This approach has a dramatic effect on the 
volume of tourist spending attributable to 
the examined institutions by severely re- 
stricting the number of visitors counted. 
In addition, the protocol excludes the 
larger-spending group of culture audiences 
who were in the community for other reasons 
and who tend to stay for a night or more. 
Thus, the protocol can sharply limit the 
counted volume of visitor spending attrib- 
utable to individual institutions. The 
magnitude of this effect is a function of 
the size of the audience and the propor- 
tion of sole-reason attenders . The pro- 
tocol especially affects the museums in 
the sample, several of which reported a 
large volume of nonlocal attenders , pro- 
portionately few of whom were in the city 
solely to use the museums. Consequently, 
the effect of the protocol on each city's 
case study is significantly affected by 
the proportion of museums in the mix of 
institutions they chose to examine. 

Resu lts of audience surveys . As part of 
the case studies , self-administered aud- 
ience surveys were conducted at each insti- 
tution. This effort resulted in approx- 
imately thirty thousand responses. Non- 
local audiences in the SMSA were asked to 
report whether they had anticipated at- 
tending the surveyed activity when they 
made their plans to come to the city.. They 
were also asked whether, this was the sole 



reason for their being in the community. • 

Since examined institutions do not consti- 
tute a probability sample, it would be 
inappropriate to generalize in a statisti- 
cal sense from them to the broader universe 
of cultural institutions. This is especial- 
ly true because institutions, even instit- 
utions of the same type, vary widely. It 
is clear, however that many cultural act- 
ivities are capable of creating a visitor 
market on their own and that they apparent- 
ly respond as well to demand by visitors 
who are in the community for other than 
cultural reasons. s Of the nearly 7.2 mil- 
lion in total audiences in the six cities, 
20 percent, or 1.4 million, were visitors. 
Nearly 300,000 were sole-reason attenders 
in six cities because they came specific- 
ally for cultural reasons. 



The variati 
number of f 
centage of 
iences refl 
State Capit 
Illinois St 
attractions 
total audie 
In San Anto 
Museum of T 
bulk of vis 
elusion of 
doubt have 
audience mi 



ons within 
actors. Th 
visitors i 
ects the i 
ol and the 
ate Museum 
accounted 
nces and 9 
nio, the W 
ransportat 
itors . In 
other inst 
affected t 
x . 



cities are due to a 
e extremely high per- 
n Springfield aud- 
nclusion of the Old 

Art Collection, 
. These major tourist 

for 78 percent of 
7 percent of visitors 
itte Museum and the 
ion account for the 

all cities , the in- 
itutions would no 
he visitor and local 



The data indicate that museums in the six 
cities have a considerably higher propor- 
tion of their visitors from outside the 
region than the performing arts, ranging 
from 10.9 percent to 80.7 percent. Non- 
local performing arts audiences were al- 
most always under 10 percent of the total. 

Among visitors, there was great variation 
among the institutions in the percentage 
who had expected to attend when making 
plans to come to the community. At art, 
science, and history museums or facilities, 
this ranged from 25.3 percent to 70.4 per- 
cent of visitor audiences. At performing 
arts groups the range was from 35.3 per- 
cent to 91.7 percent of visiting audiences . 
Attending performing arts events generally 
requires more advance planning than other 
cultural activities. Among visitors for 
whom attendance at the institution was their 
sole reason for being in the community, 
the performing arts had a higher percen- 
tage than the museums. Again, there is 
tremendous variation by institution so that 
there are as few as 6.1 percent and as many 
as 88.5 percent of sole-reason visitors m 
performing arts audiences. 



Factors affecting drawing power . Data on 
nonlocal visitinc audiences suacrest wide 



variations in drawing power among indivi- 
dual activities, whether they are viewed 
as attractions that contribute to a deci- 
sion to visit a region or as activities 
used once a visitor is in the community. 

Institutions vary in type and quality; they 
may be sold out to local audiences or may 
not be well known outside their community; 
some may not be conveniently located to the 
general public and centers of visitor ac- 
tivity. The cost of admission will vary 
as will the ease with which tickets may be 
purchased. Museums, for example, may be 
open daily and admission may be free, while 
certain performing arts activities may be 
high priced, with tickets available only at 
the box office or by subscription, and 
there may be only a few performances a 
year. In these circumstances, nonlocal 
audiences could not attend unless they 
planned ahead. 

Culture and central cities . Although these 
studies are intended to identify effects 
on the entire U.S. Bureau of the Census 
Standard Metropolitan Statistical Area or 
SMSA, economic development practitioners 
in central cities may have a special inter- 
est in their findings. The examined events 
and facilities were typically located in 
the central city. In addition to visitors 
from outside the SMSA, these activities 
regularly bring thousands of suburban re- 
sidents back to the city and can help draw 
people to redeveloped downtown and neigh- 
borhood areas. This may help maintain mar- 
kets for other city businesses and create 
an urban environment attractive to resi- 
dents and visitors alike. 

Estimated audience spending . Tables pre- 
senting audience summary data are found in 
each of the six city chapters. The effect 
of the protocol discussed above is espe- 
cially significant in St. Louis. While all 
nonlocal attenders there are estimated to 
have spent $74.8 million, sole-reason vis- 
itors reported spending only $1.3 million. 
Across all six cities, the figures are 
$132.8 million and $7.3 million. In short, 
the protocol eliminates over $120 million 
in audience spending, over half of which 
is accounted for by the St. Louis study 
alone . 



Table 1-1 



Audience per capita spending 



By including total spendi 
visitors during their sta 
to derive differing audie 
timates depending on the 
For example, using as a b 
spending reported by loca 
is possible to derive two 
ferent estimates of per c 
spending, depending on wh 
spending by all visitors 
only spending by sole-rea 



ng incurred by 
y, it is possible 
nee spending es- 
protocol adopted. 
ase the ancillary 
1 audiences , it 
radically dif- 
apita audience 
ether ancillary 
is included or 
son visitors. 



Local and 

nonlocal Total 

(sole reason) audience 



Columbus $ 3.83 

Minneapolis/ 

St. Paul $ 4.35 

St. Louis $ 3.44 

Salt Lake City $ 3.56 

San Antonio $ 5.66 

Springfield $ 4.65 



$ 9.34 

$ 8.65 
$27.53 
$ 9.76 
$27.52 
$14.21 



Table 1-1 indicates the range of values 
produced by these two procedures. As the 
more detailed audience spending tables in 
individual city chapters show, museums 
particularly benefit from procedures that 
count all expenditures by all visitors 
because of the lower incidence of sole- 
reason visitors to museums. 

Questions may be raised also regarding lo- 
cal audience spending. It may be argued 
that here, too, the only audience effects 
traceable directly to an institution are 
audience payments for admission. If " aud- 
ience members happen also to go to a bar 
or restaurant, it is not clear how this 
is tied to the operation of the institution 
as a direct, indirect, or induced effect. 
A local resident might have gone to the 
restaurant even if he had not gone to the 
arts event. To claim that these ancillary 
expenditures are an impact of cultural in- 
stitutions appears to suggest that attend- 
ing an activitv causes the audience to 
spend over and above their admission cost. 
At issue is whether audience members would 
have spent the money in the SMSA even if 
they had not attended the activity. 

In the city studies, ancillary spending by 
local audiences and sole-reason visitors 
was included among the direct effects at- 
tributed to the examined institutions. 



19 



Table 1-2 



Direct economic effects of examined institutions 



Columbus 



Minneapolis/ 
St. Paul 



St. Louis 



Local expenditures for 
goods and services 

Employee salaries and 
wages 

Local audience spending 

Nonlocal, sole-reason 
audience spending 

Guest artist spending 



$1,525,012 40% $ 7,335,778 26% $ 5,248,714 25% 



$2,045,981 32% 

$1,669,070 26% 

$ 964,368 15% 

$ 132,390 2% 



$10,852,362 38% 

$ 7,339,916 26% 

$ 2,967,612 10% 

$ 104,223 



$ 7,652,004 37% 

$ 6,600,197 32% 

$ 1,290,134 6% 

$ 119,576 



Total 



56,336,821 100% $28,599,891 100% $20,910,625 100% 



Institutions 
Attendance 
Operating budgets 
Local expenditures 



698,920 
$4,249,182 
$3,570,993 



10 

2,765,448 

$21,737,947 

$18,188 ,148 



2,503,500 
$13,922,589 
$12,900,718 



20 



Direct and secondary economic effects 

Dxrect economic effects by city. Table 1-2 
presents direct economic effects for the 
institutions examined in each city. It is 
important here to reemphasize that the 
forty-nine institutions are not a scien- 
tific and weighted sample of various types 
of cultural institutions. Effects might 
have been significantly different had 
sponsors selected a different mix of lo- 
cal cultural resources. The examined in- 
stitutions are best viewed as illustrative 
of the range of differences within and 
among institution types. They help also 
to illuminate essential factors that de- 
termine the local impact of the arts. 

I nstitution-related local expenditures . 
The forty-nine institutions had total at- 
tendance of 7.2 million and operating bud- 
gets totaling $51 million of which 51 
percent or $26.1 million was devoted to 
local salaries and wages. An additional 
$17.3 million or 34 percent of total ex- 
penditures was spent locally for goods and 



services. Overall, some 85 percent or 
$43.4 million of total operating expendi- 
tures were spent locally for goods, ser- 
vices , and wages . 

Local and visitor audiences at the insti- 
tutions spent $17.5 million and $7.3 mil- 
lion respectively, representing 25 percent 
and 11 percent of total local expenditures 
of $68.7 million. (Local expenditures for 
goods and services were 25 percent of to- 
tal local expenditures while local sala- 
ries and wages comprised 3 8 percent of 
local spending.) Guest artists spent 
$472,974, less than 1 percent of total 
local expenditures. 



The magnitude 
direct effect 
cities reflect 
institutions . 
field — the 111 
Old State Capi 
fluential with 
and impact of 
spending, and 
such spending 



and weight of an individual 
either by city or across 
s the impact of individual 

Two institutions in Spring- 
inois State Museum and" the 
tol — are particularly in- 

respect to the magnitude 
nonlocal sole-reason audience 
account for virtually all 
in Springfield. 



Salt Lake City 



San Antonio 



Springfield 



Total 



$1,804,405 30% 



$ 940,226 



25% 



$ 396,654 



13% 



$17,250,789 



23. 8% 



$3,115,024 51% 
$ 749,467 12% 



$1,485,402 40% 
$ 692,722 19% 



$ 9,81,461 33% 
$ 431,526 14% 



$26,132,234 38.5% 
$17,482,898 21.5% 



$ 381,491 6% 
$ 30,110 



$ 585,469 16% 
$ 32,224 



$1,133,727 38% 
$ 54,451 2% 



$ 7,322,801 15.2! 
$ 472,974 2.0^ 



$6,080,497 100% 



$3,736,043 100% 



$2,997,819 100% 



$68,661,696 100.0% 



10 

348,772 

$6,104,073 

$4,919,429 



467 ,350 
$3,041,073 
$2,425,628 



10 

410,411 

$1,912,786 

$1,378,115 



49 

7 ,194 ,401 

$51,017,650 

$43,383,031 



21 



Simpl e indicators of institution impact . 
For the group ail a whole, the ratio of 
total direct effects to total operating 
expenditures was 1.34 while direct effects 
totaled roughly $9.54 per attender. How- 
ever, inspection of the data at the insti- 
tution level reveals the danger of such 
simple indicators of institution impact. 
For example, organizations with respect- 
able budgets but low attendance can have 
a relatively high impact per attender. A 
more interesting measure is simply the 
ratio of total direct effects to total op- 
erating revenues. This measure ignores 
size of institutional budget and rewards 
local institutional spending, local audi- 
ence size and spending, especially atten- 
dance and spending by sole-reason visitors . 
Because this emphasizes sole-reason visi- 
tors, it penalizes museums. 

This ratio for the mix of institutions in 
each city is presented below. Springfield 
benefits from tourist spending at the 
sites noted earlier. 



Columbus 

Minneapolis/St. Paul 
St. Louis 
Salt Lake City 
San Antonio 
Springfield 



49 

31 
50 
99 
23 
57 



The ratio for Salt Lake City reflects the 
relatively small size of audiences and the 
limited number of sole-reason visitors 
(as compared to the institutional mix 
identified in other cities). 

Influences on direct economic effects 

An institution's direct effects as defined 
in this report are essentially an expres- 
sion of the size of its own operating bud- 
get, the percentage of it spent locally, 
and the magnitude of sole-reason visitor 
and local audience spending. The inclu- 
sion of audience spending and the restric- 
tive protocol adopted for local and visi- 
tor audiences can have a significant im- 
pact on any single institution's direct 
effects . 

Local spending by examined institutions . 
As is evident from Table 1-2, institutions 
in all cities were able to meet a high 
proportion of their operating needs lo- 
cally, principally because the bulk of 
their operating budget was devoted to lo- 
cal salaries and wages. This table con- 
tains the information necessary to deter- 
mine for each city the proportion of to- 
tal operating budgets devoted to local 
expenditures for salaries and wages and 
goods and services. 

Subsidy support . The institutions examin- 
ed in this study are either nonprofit cor- 



porations or government agencies. Conse- 
quently, budget size reflects not only 
revenues earned in the marketplace but 
the ability and willingness of individuals , 
firms, and government to provide subsidy 
support. The history, patterns, and prac- 
tice of such support vary by city. Subsidy- 
support is particularly important to muse- 
ums and other facilities which offer free 
admission and rely on "unearned" income 
for the bulk of their operating budget. 
There were some performing arts institu- 
tions in the sample, however, for which 
subsidy, especially government support, 
was the single largest source of revenue. 

The ability of an institution to produce 
income reflects regional market conditions 
and the availability of public and private 
support. Presumably, these factors are 
responsive to the quality of an institu- 
tion' s programming and management. 

3ecause of the importance of revenues tc 
government that are attributable to cul- 
tural institutions, which are among the 
secondary effects to be discussed, the ex- 
tent to which an institution's local 
spending represented a return to the com- 
munity of local, state, or federal tax 
revenues was identified. Table 1-3 gives 
this data by city. Again, the results for 
each city reflect only the examined institu- 
tions and may not represent the entire 
universe of local nonprofit cultural re- 
sources . 

As noted previously, aggregate data by 
and across cities can be distinctly influ- 
enced by individual institutions . Once 
again, the Springfield data reflect the 
inclusion of the Illinois State Museum and 
the Old State Capitol which are state 
funded and account for 81 percent of re- 
ported operating budgets. In San Antonio, 
the Carver Cultural Center is almost com- 
pletely funded through local appropria- 
tions. In St. Louis, the Museum of Science 
and Natural History , McDonnell Planetarium , 
and the St. Louis Art Museum are subdis- 
tricts of the Metropolitan Zoological Park 
and Museum District which assesses a pro- 
perty tax for their support in St. Louis 
City and County. Tables in the individual 
city chapters present data on tax revenues 
and sources for each institution. 

Tor the group of forty-nine institutions 
as a whole, eleven derived 40 percent or 
more of operating revenues from govern- 
mental sources , nine derived 20 percent to 
40 percent, six derived 10 percent to 20 
percent, fifteen derived less than 10 per- 
cent, and three reported no income from 
government; data were not available on the 
other institutions. These data do not in- 
clude an accounting of federally-funded 
CETA positions . 



22 



Table 1-3 



Government revenues as a percentage of examined institutions' operating budgets 



Local 



State 



Federa 


1 


2. 


.9% 




'3. 


,6% 




5. 


,8% 




11. 


,5% 




8. 


,7% 




2. 


,7% 





Total 

7.2% 
7.1% 
37.8% 
31.8% 
35.4% 
80.6% 



CblumbUS ■':■; -£~j ; ; ^. 

Minneapolis /St. Paul 
sIv^Louis -y^j^k:'^- 
Salt Lake City 
San Antonio 
Springfield 



2.1% 

.4% 

24.2% 

6.3% 
26.5% 

1.2% 



2.2% 
3.1% 
7.8% 

14.0% 
.2% 

76.7% 



Secondary economic effects 

Earlier in this overview a basic defini- 
tion was given of interindustry analysis 
as a tool for identifying other than di- 
rect effects of spending by households and 
firms. As part of the city case studies 
coefficients and multipliers derived from 
interindustry studies have been used to 
estimate indirect and induced business 
volume, personal income, and jobs. For 
the purpose of this study, these are re- 
ferred to as secondary effects. While 
study procedures allow an estimate of these 
effects, it cannot be inferred that none 
would have occurred in the absence of one 
or more of the specific institutions ex- 
amined as part of this study. 

In addition to secondary business volume, 
income, and jobs, the study sought to es- 
timate the initial expansion of the local 
credit base due to bank deposits held lo- 
cally by the institutions, their employees, 
and the local businesses benefiting from 
institution-related direct effects. Each 
examined institution and its employees 
provided estimates of average daily balan- 
ces in checking and savings accounts. Lo- 
cal cash-to-business volume ratios were used 
to estimate cash held by firms benefiting 
from institution-related expenditures. 

Area firms benefiting from institution- 
related direct effects have, over time, 
invested in the plant, inventory, and 
equipment needed to support this business 
volume. To estimate the fiscal 1978 value 
of these investments in business property, 
it was first necessary to estimate the 
total value of all local business property. 



23 



Business real property associated with in- 
stitutional direct effects was assumed to 
be proportional to institutional direct 
effects as a percentage of total local 
fiscal 1978 business volume in each city. 
Table 1-4 presents estimates of each of 
these secondary effedts discussed earlier 
(This does not include salaries and jobs 
at the examined cultural institutions. 
The forty-nine institutions provided 1,61! 
full-time employment opportunities paying 
$25,132,234 in salaries and wages.) 

Influences on secondary economic effects 



The principal influence 
ness volume, jobs, and 
nitude of direct effect 
ments of the local indu 
It has already been poi 
tiplier estimates will 
the volume of imports o 
and labor, and other fo 
that the more the local 
the greater the proport 
effects retained and re 



s on second 
income are 
s and local 
stries that 
nted out th 
vary invers 
f goods, se 
rms of leak 
economy ca 
ion of loca 
spent local 



ary busi- 
the mag- 

require- 
benef it . 
at mul- 
ely with 
rvices , 
age ; and 
n supply, 
1 direct 

iy- 



Instituti 
credit ba 
of employ 
cash mana 
instituti 
demand ac 
timates o 
ventory , 
rectly wi 
of busine 



on-related 
se are a fu 
ees , their 
gement prac 
onal practi 
counts . Th 
f the curre 
equipment, 
th local es 
ss property 



effects on the local 
notion of the number 
household incomes and 
tices, together with 
ces regarding time and 
ese varied widely. Es- 
nt value of backup in- 
and property vary di- 
timates of the value 
and the ratio of the 



direct effects for each city to total lo- 
cal business volume. 

Government revenues and costs 

In addition to estimating the direct and 
secondary effects discussed earlier, this 
study soughr to identify selected fiscal 
1978 effects on local governments attribu- 
table to the examined institutions. 

Revenues to local governments included 
local real estate taxes paid by the ex- 
amined institutions and their employee 
households, and a portion of business pro- 
perty taxes attributable to institution- 
related direct effects. Other examined rev- 
enue sources included local sales and in- 
come taxes, lodging and gasoline taxes, 
admission taxes, and parking revenues. In 
each case study, real estate taxes account- 
ed for the greatest portion (47 percent 
and 7 6 percent) of local government rev- 
enues related to the examined institutions. 
In Columbus and Minneapolis/St. Paul, about 
50 percent of these property tax revenues 
are attributed to assessments over time by 
businesses responding to institution-related 
direct effects. The proportion for Spring- 
field is 30 percent, and for Salt Lake City 
21 percent. Cities varied in terms of the 
relative importance of other estimated rev- 
enue sources. Two SMSAs assessed a local 
income tax, one assessed a restaurant tax, 
one assessed an admission tax, while sales 
tax estimates across cities varied by tax- 
able items and rates . 



Table 1-4 



Secondary economic effects of examined institutions 



Columbus 



Minneapolis/ 

St. Paul St. Louis 



Salt Lake 
City 



Institutions 



10 



10 



Business volume 
Personal income 
Full-time jobs 



$10,539,968 $57,211,537 $42,246,030 $9,978,282 

$ 4,044,301 $21,720,604 $15,899,168 $3,876,184 

574 3,053 2,005 631 



Initial expansion of the 
local credit base 

Current value of back-up 
inventory, equipment, 
and property 



$ 3,221,487 $ 6,849,136 $ 6,058,120 $2,970,735 



$ 4,442,864 $15,837,042 $12,445,444 $2,408,853 



24 



Costs to local governments included an es- 
timate of the local governmental operating 
expenditures required to provide services 
to employee households, including the costs 
of public instruction for households with 
children in public schools. Local govern- 
ment contracts for services, grants, op- 
erating subsidies and other support were 
also identified. Study procedures appor- 
tioned to all employee households a share 
of local governmental operating expendi- 
tures in all areas except public education. 
Separate cost estimates were derived for house- 
holds with children in local public schools . 

Table 1-5 summarizes local revenues and ex- 
penditures attributable to examined insti- 
tutions in the six cities. A more complete 
picture of these effects, including their 
variation from institution to institution, 
can be gained by examining Table 9 in each 
city chapter. No information is available 
which indicates whether the identified ef- 
fects are typical of the broader universe 
of local institutions or are specific to 
the examined mix of institutions. 

In reviewing them, bear in mind the limited 
nature of the analysis and the procedures 
used to derive estimates when this was 
necessary. Sales, income, and property 
tax estimates do not include taxes paid by 
individuals and firms benefiting from in- 
stitution-related secondary effects. In 
addition, favorable or unfavorable spill- 
over effects on local business opportuni- 
ties and stability have not been assessed, 



Table 1-5 



Estimated revenues and costs 
to local government 
related to examined institutions 
by city 



City 



Revenues 



Columbus 

Minneapolis/ 
St. Paul 

St. Louis 

Salt Lake City 

San Antonio 

Springfield 



$ 381,251 

$2,135,340 
$1,117,059 
$ 405,680 
$ 126,083 
$ 187,581 



Costs 



$ 245,349 

$1,146,525 
$3,987,435 
$ 635,590 
$ 859,749 
$ 110,867 



San 
Antonio 



Spring- 
rf ield 



Total 



1Q 



49 



nor has neighborhood residential quality 
as it affects property and other tax reve- 
nues. More generally, no attempt has been 
made to assess the governmental costs and 
benefits associated with the more subtle 
and indirect effects that may be associat- 
ed with the arts. In addition, no infor- 
mation is available by which to assess 
whether the identified effects are typical 
of the broader universe of available lo- 
cal institutions or are specific to the 
examined mix of institutions. 



$6,185,327 

$2,345,260 

347 



$ 862,529 



$1,044,720 



$3,223,011 

$1,316,946 

161 



$129,380,000 

$ 49,202,463 

6,771 



$ 901,705 



$ 20,863,712 



$ 1,643,852 $ 37,822,775 



Procedures focused on sources of locally 
generated revenues, including sales, in- 
come, and property taxes, and parking and 
other apporpriate local revenues sources. 
Property tax revenues were the single 
largest revenue source in each city. Prop- 
erty tax receipts as a percentage of esti- 
mated tax revenue are presented below. 



Columbus 

Minneapolis/St. Paul 
St. Louis 
Salt Lake City 
San Antonio 
Springfield 



58% 
69% 
61% 
76% 
47% 
57% 



25 



In Columbus and Minneapolis/St. Paul, about 
50 percent of these property tax revenues 
are attributable to investments over time by 
businesses responding to institution-re- 
lated direct effects. The proportion for 
Springfield is 30 percent, and for Salt 
Lake City 21 percent. Cities varied in 
terms of the relative importance of other 
estimated revenue sources. Two SMSAs as- 
sessed a local income tax, one assessed a 
restaurant tax, one assessed an admission 
tax, while sales tax estimates across cities 
varied by taxable items and rates. 

Foregone property tax . Finally, the exam- 
ined institutions include a mix of facili- 
ties owned and operated either by govern- 
ment or nonprofit corporations, and there- 
fore are tax-exempt. In several cities, 
the lack of assessed valuation data and 
other limitations made it impossible to 
derive estimates of foregone property taxes . 

Simple indicators of tax effects. For 
reasons noted in the earlier discussion 
of simple indicators of institution impact , 
it is dangerous to present such indicators 
that do not take account of differences 
across institutions. It is interesting to 
note, however, that when institutions are 
aggregated, tax revenue estimates as a per- 
centage of total institutional ooerating 
expenditures are similar across cities: 



Columbus 

Minneapolis/St. Paul 
St. Louis 
Salt Lake City 
San Antonio 
Springfield 

Effects not examined 



9% 

10% 
8% 
7% 
4% 

10% 



This report has treated arts and cultural 
institutions quite narrowly by focusing on 
activities considered simply as local eco- 
nomic enterprises. This focus may not 
capture the total range of benefits to 
local residents. It has been observed 
that cultural institutions have a role in 
economic development apart from the eco- 
nomic activity directly related to their 
operations; that their availability affects 
the perceptions, satisfactions, and resul- 
ting behavior of households and firms , 
including decisions to locate in the com- 
munity or remain and expand. Arts and 
other facilities may be useful in helping 
to create surroundings attractive to tour- 
ist and convention visitors, to establish 
a climate in which the decision to locate 
or remain in the inner city, city, or 
region is viewed favorably. 

Policy observations 

Data take on policy significance when they 
answer questions of public interest and 



help shape decisions regarding goals, and 
the programs best suited to achieve them. 
The development of policy is as much a 
matter of asking the right questions as 
of compiling the quality data needed for 
answers . In an unpublished report to the 
Arts Endowment's Research Division, Dick 
Netzer made the following assessment of 
the policy significance of available eco- 
nomic impact literature, an assessment 
based on his understanding of how arts 
and cultural advocates were posing such 
questions: "Our interviewees repeatedly 
noted the need for studies of the economic 
impact of the arts, in connection with ad- 
vocacy, in the sense of demonstrating that 
public expenditure for support of the arts 
is a 'good buy.' It is virtually impossible 
to think of any other conceivable use of 
data of this type, data that are expensive 
to produce ... . " ( Final Report on a Fea - 
sibility Study for an Economic Data Program 
on the Condition of Arts and Cultural Or - 
ganizations , New York: New York University, 
1977). Netzer 's analysis presumes that 
these advocates are, in effect, utilizing 
impact studies to assess the cost/benefit 
of governmental appropriations tunneled 
through the arts and culture. 

It is presumed that the question of cul- 
tural economic impact is framed as follows: 
In general, do public dollars devoted to 
culture have more impact than public money 
spent for other purposes? Advocates are 
aware that some decision-makers believe 
culture is a "drain" on the local economy 
and have concluded that this is a stumbling 
block to increased appropriations. 

For example, among the press reports ac- 
companying the release of the- Salt Lake 
City case study was an article headlined 
"Local Arts Spell Big Business." The 
story quoted a staff member of the local 
arts council who indicated that the case 
study "should put a new light on the arts" 
and went on to say, "It has long been the 
assumption of certain individuals that the 
arts are some kind of drain on the city 
treasury. That expenditures for the arts 
are justifiable only through an intangible 
quotient called the 'quality of life,' 
that the arts are somehow feeding in the 
trough of public subsidies — subsidies that 
by implication should be eliminated." (The 
Salt Lake Citv Tribune, March 30, 1980)" 



Do appropriations have any economic sig- 
nificance in terms of jobs, and income and 
tax revenues, and is that impact sufficient 
to counter the view that tne arts are a net 
"drain" on the local economy? There is 
the clear suggestion that some cultural ac- 
tivities are responsible for as much in tax 
revenues as they get in appropriations and 
that they have noticeable if modest imoacts 



on jobs and income in other sectors of the 
economy. Further, it is clear that cultur- 
al programs can serve both residents and 
visitors in a metropolitan area. Cultural 
activities may sometimes be solely respon- 
sible for inducing persons outside metro- 
politan areas to make day and night trips. 
It may be assumed that even when cultural 
organizations are not solely responsible 
for these visits, they may often be one 
among other planned activities, and so may 
directly contribute to increasing the num- 
ber of audience visits. 

At the same time, it is also clear that 
the nonprofit institutions examined in this 
study are small businesses that sell the 
majority of their "output" to local resi- 
dents. It is interesting in this vein to 
note a commercial parallel, that the gross 
sales of an average McDonald's restaurant 
unit totals on the average some $1 million 
annually. This is considerably larger than 
the annual budgets of most nonprofit cul- 
tural activities. In the context of local 
business volume, the examined institutions 
have a relatively modest impact, even tak- 
ing into account spending by local audiences 
and visitors. Further, there is tremendous 
variability among institutions and inherent 
constraints on expanding the impact of cul- 
tural institutions considered simply as 
local economic enterprises. 

There are many ways to express the question 
of economic impact. Rather than valuing 
cultural activities simply as economic 
enterprises in their own right, they could 
have been investigated as tools for achie- 
ving specific development objectives. In 
these circumstances, the decision makers 
posing the economic impact question are 
not legislators, but community development 
agencies determining whether cultural ac- 
tivities have any value for their noncul- 
tural purposes . 

This point of view may be particularly im- 
portant to persons concerned with community 
revitalization as opposed to regional econ- 
omic growth. In their own right, cultural 
activities may be only modestly important 
as generators of business activity within 
an SMSA. However, they may have consider- 
ably more importance for place-specific ob- 
jectives. These objectives may not be ex- 
pressed in terms of increasing net economic 
benefits to the region, but devoted instead 
to improving the distribution of economic 
activities and investments to assure the 
revitalization of places within the region. 

These revitalization objectives may be ex- 
pressed in terms of outcomes, e.g., the re- 
tention and attraction of firms and house- 
holds, as well as in terms of the attitud- 
inal and satisfaction dimensions that are 
thought to induce behaviors relevant to the 
process of community revitalization. 



Caveats on merging cultural and economic 
development planning^ One concern during 
the Baltimore research, discussed previous- 
ly, was the potential misuse of economic 
impact data in the development of cultural 
policy. Programs might be favored on the 
basis of the scale of their own direct and 
secondary effects on the local economy. If 
decision makers are encouraged to treat 
investments in cultural activities because 
they solve particular economic development 
problems, the risk occurs of defining de- 
velopment objectives solely in terms of 
short-run community revitalization goals. 
In providing this analysis of the economic 
effects of a sample of cultural activities, 
it is not advocated that impact data are 
to be used as important determinants of pub- 
lic policy toward arts and culture, especial- 
ly in the absence of support of arts and 
culture for their own sake. 

The need for additional research. The cul- 



tural in 
are eith 
ment age 
types of 
ities th 
cacy eff 
nation 1 s 
and perf 
commerci 



stitutions 
er nonprof 
ncies . Th 

museums a 
at are the 
orts. How 

literary, 
orming art 
al enterpr 



examined in this study 
it corporations or govern- 
ey encompass the various 
nd performing arts activ- 

typical focus of advo- 
ever , the bulk of the 

visual arts, musical 
s output is produced by 
ises . 



Apart from additional questions concerning 
the economic impact of the culture industry 
however it is defined, it is evident that 
an adequate framework within which to eval- 
uate the more indirect and subtle effects 
claimed for cultural activities does not 
exist. Preliminary work suggests that 
further examinations of cultural impact 
will require understanding the success of 
an arts or cultural activity in its own 
terms and how this reflects other aspects 
of community life while contributing to 
specific objectives. 

A willingness, for example, to invest in a 
community's cultural life will be deter- 
mined by a variety of matters ranging from 
historical and social factors to property 
taxes, the (perceived) safety of a neigh- 
borhood, the availability of investment 
capital, current energy and mortgage re- 
lated market pressure, special city in- 
ducements to invest, changes in family 
size and structure, suburban no-growth 
policies, and so forth. Cultural effects 
may vary with the quality and frequency 
of activities . It may prove impossible 
to develop economic models specifying the 
community conditions under which particu- 
lar levels and quality of cultural. output 
are not only feasible but likely to achieve 
economic development objectives. The abil- 
ity to anticipate development outcomes and 
the imagination to use arts and culture 
effectively in a community context may al- 
ways be more art than science. 



27 



CHAPTER II 



THE COLUMBUS ECONOMY AND 

ARTS AND CULTURAL INSTITUTIONS 



Columbus 

Standard Metropolitan 

Statistical Area (SMSA) 



The following institutions in the Columbus 
Standard Metropolitan Statistical Area or 
SMSA were selected for study by the Greater 
Columbus Arts Council: 

Ballet Metropolitan 
Columbus Museum of Art 
Columbus Symphony Orchestra 
Center of Science and Industry 
Players Theatre of Columbus 
Columbus Association for the 
Performing Arts (Ohio Theatre) 

These represent a range of organizational 
types and include some of the more well- 
known local institutions. Their selection 
resulted from locally initiated efforts 
to identify interested organizations. 

The successful completion of the Columbus 
project was due to the efforts of a num- 
ber of persons, including the principal 
project staff of the Arts Council. Ric 
Wanetik, executive director of the Council , 
served as study director and Tim Sublette, 
assistant director, was responsible for 
coordinating the day-to-day tasks. Jackie 
Brown, program associate, assisted in the 
collection of operating and financial in- 
formation. A corps of students recruited 
through the high school art leagues helped 
in the distribution of audience study ques- 
tionnaires. Other staff persons and vol- 
unteers are identified at the end of this 
report. 

Columbus institutions 

In 1878, a group of Columbus citizens de- 
cided that the city should have a place 
in which to enjoy the visual arts. By the 
turn of the century, an art school had 
been organized and funds raised to house 
an art gallery. The main building was 
built in 1931, and a new wing opened in 
1974. The Columbus Museum of Art (for- 
merly the Columbus Gallery of Fine Arts) 
houses a broad selection of paintings and 
sculpture augmented by decorative and 
ethnic arts objects. Lectures, classes, 
films, and concerts are available to the 
public. 

The Columbus Association for the Perform- 
ing Arts, formed in 1969, has restored 
the former Loew's and United Artists Ohio 
Theatre, built in 1928, as a performing 
arts center. In addition to performances 
by the Ballet Metropolitan and the Columbus 




Based on U.S.Depl. ol Commerce, Bureau of Ihe Census. 
Current Population Reports. Series P-26 



Symphony Orchestra, the Ohio Theatre hosts 
performances by Broadway touring shows, 
various ethnic dance companies, jazz con- 
certs, and movies, as well as performances 
by many local artists and groups. 

Players Theatre was formed as a club in 
1923. In 1966, the theatre opened its 
doors to the public and now produces plays 
for adults and children, as well as offer- 
ing classes and workshops. This community 
theatre now produces six to eight major 
pr6ductions each season. 

Ballet Metropolitan was incorporated as a 
club in the State of Ohio as a nonprofit 
organization in September 1974. Ballet 
Metropolitan presents classic and modern 
programs; sixty- three performances were 
planned for the 1979-80 season. 

The Center of Science and Industry opened 
to the public in April 1964, and is a part 
of the Franklin County Historical Society. 
The center's exhibitions are primarily in 
the fields of science, health, history, 
and industry. 

The Columbus Symphony, which was founded 
in 1952, presents concerts of classical, 
chamber, ensemble, choral, operatic, and 
popular music. The symphony also pre- 
sents free or low-cost public service 
events for the community. 



29 



Table 11-1 



Columbus SMSA demographics 



Age (1977) 



Education (1970) 



18-24 
25-34 
35-49 
5 and over 



15 


.9% 


16 


. O 6 


16 


1 9- 


21 


75- 



Less than 5 years 

4 years of high school or more 

4 years of college or more 



2.7% 

60.7% 
14.0% 



Median age 



Median education 



12.3 



Columbus economy and the broader cultural 
community 

An examination of the economy and broader 
cultural community of the city and Colum- 
bus SMSA will contribute to an understand- 
ing of the effects ascribed to the six 
examined institutions. Table II-l presents 
useful market data such as the Effective 
Buying Income (EBI) , a measure of the buy- 
ing power of households after government 
deductions for taxes, social insurance, 
and lesser items; it also shows income, 
age, education, and population information. 

The Columbus SMSA consists of the city of 
Columbus and the counties of Franklin, 
Fairfield, Delaware, Pickaway, and Madison. 
In this study the terms "local," "the Col- 
umbus metropolitan area," and "the Colum- 
bus region" are used interchangeably to 
identify the Columbus SMSA. The SMSA pop- 
ulation is estimated to have grown from 
1,017,847 in 1970 to 1,072,00 in 1976 
("Population Estimates and Projections," 
U.S. Dept. of Commerce, Census Bureau, 
Series P-25, No. 739, November 1978). The 
City of Columbus is estimated to have a 
population of approximately 530,000. 

Columbus was established in 1812 as a 
planned political center by an act of the 
Ohio legislature. The city became the 
capital of Ohio in 1816, and later the 
seat of Franklin County. Today, govern- 
ment plays an important role in the eco- 



nomic stability of the Columbus SMSA, 
accounting for over 19 percent of employ- 
ment ("Central Ohio: 7 9 Outlook," Columbus 
Business Forum, Columbus Area Chamber of 
Commerce, January 1979). The State of 
Ohio employs over twenty thousand area res- 
idents not including Ohio State University 
which employs 16,241 people. 

The federal government (excepting the armed 
forces) employs over eleven thousand; rhe 
City of Columbus approximately 7,50 0; the 
Columbus Public Schools over seven thousand 
and Franklin County roughly 4,500. 

The largest private employers are Western 
Electric; F & R Lazarus Company; Sears Roe- 
buck and Company; and Ohio Bell Telephone 
Company, each of which employed over five 
thousand workers. The Fisher Body division 
of General Motors Corporation, Nationwide 
Insurance Co., Kroger Company, and Conrail 
each employed over three thousand workers. 
In addition, there were twenty-six firms 
that each employed between one thousand and 
three thousand workers. The home offices 
of fifty-two insurance companies were lo- 
cated in Columbus. Overall, 24 percent of 
the employed work force worked in retail 
and wholesale trade, 20 percent in manufac- 
turing, and nearly 20 percent in services 
and miscellaneous industries. (Employment 
data derived from "Largest Employers in the 
Columbus Area," Columbus Regional Informa- 
tion Center, Columbus Area Chamber of Com- 
merce, Mav 1979.) 



30 



Population (selected years! 



1960 

1970 
1975 
1977 



Population change 
1960-1970 

1970-1975 



682,962 

1,017,847 
1,068 ,514 
1,082,100 



+20.4% 

+ 5 . 8% 



Household income (1977 

$8,000-$9,999 
$10,000-$14,999 
$15,000-$24,999 
$25,000 and over 



19 77 median household income 

1969 median household income 

Average annual change in 
per capita income 1969-74 



6.0% 
18.0% 
33.9% 
21.2% 



$16,336 
$10,460 

7.2% 



The manufacturing sector of the Columbus 
economy has undergone a period of rapid 
growth and diversification since the es- 
tablishment of a large aircraft plant in 
Columbus in 1941. This diversification 
has included the establishment of major 
plants specializing in the production of 
space equipment, automotive parts, elec- 
trical equipment and appliances, china- 
ware, glass, coated fabrics, shoes, and 
food products. Rapid expansion has been 
encouraged by the city's favorable geo- 
graphic location and a transportation 
network which includes five major rail- 
roads, an extensive highway network, and 
an airport, Port Columbus. 

The Columbus Business Forum reports that 
"the movement toward a service-oriented 
economy is reflected in the opening of 
several new businesses in areas supporting 
recreation and tourism, health, and other 
social services." It reports further that 
new restaurants are opening, and numerous 
improvements have been developed, includ- 
ing the Ohio Center convention complex 
with its companion six hundred-room Hyatt 
Regency hotel, the three hundred-room Mar- 
riott Inn, and the Hilton Inn East. The 
Chamber of Commerce believes that thes.e 
projects have generated new confidence in 
downtown Columbus as a place to work, shop, 
and live; the development of downtown as 
an entertainment and leisure center has been 
further enhanced by the programs of Colum- 
bus arts and cultural organizations. 



The examined institutions are only six of 
the 170 nonprofit arts and cultural or- 
ganizations identified by the Greater 
Columbus Arts Council. Although the ex- 
amined institutions may typify the impact 
of various kinds of institutions, they do 
not represent the full range of locally 
available commercial and nonprofit activ- 
ities. It is clear that the examined in- 
stitutions do not exhaust the impact of 
the "culture industry." For example, 
census data for 1970 show a total of 2,847 
employed writers, artists, and entertainers 
in the Columbus SMSA, excluding individuals 
employed in art galleries and otner arts- 
related positions. ( Where Artists Live: 
1970, Research Division Report #5 . '.vash- 
ington: National Endowment for the Arts , 
1977; see list at the back of this report). 
Onlv 123 persons were employed full time 
at the examined institutions. The yellow 
pages of the Columbus metropolitan area 
telephone directory list over one thousand 
enterprises which can be considered culture- 
related in the broadest sense. These range 
from music, art, and theatrical suppliers 
to book and record dealers, design firms, 
and commercial photographers. 

Data on the impact of some elements of these 
additional business sectors are available 



from the 1977 statistics in the U.S. Bureau 
of the Census County Business Patterns 
series. Table II-2 details various data 
on businesses used by the general public. 



Direct economic effects 

The direct economic effects of the examin- 
ed institutions include local spending for 
goods and services , salaries and wages to 
local residents, and expenditures by guest 
artists and by local and nonlocal audiences. 
Table II-3 presents selected data on insti- 
tutional direct effects during fiscal 1973. 

Local institutional expenditures for goods, 
services, and salaries . It is estimated 
that the examined institutions made 70 
percent of their expenditures for goods 
and services with local vendors and that 
this totaled $1,525,012. The percentage 
of nonlabor expenditures made locally by 
the examined institutions ranged from 14 
percent to 98 percent. An additional 
$2,045,931 was spent for salaries and 
vages to local households. No estimate 
has been made of the impact of additional 
earned and other income by institutional 
employee households, which in some in- 
stances was as high as 10 percent. 



Table 11-2 



Columbus SMSA selected businesses related to arts and culture 



Businesses 



Number Employees Payroll 



Television-radio enterprises 

Music and record stores 

Bookstores 

Photography stores 

Movie theatres (except drive-ins) 



71 


585 


$ 


6,184,000 


35 


167 


$ 


1,543,000 


28 


212 


$ 


1,379,000 


21 


85 


$ 


634,000 


32 


467 


$ 


2,028,000 



Total 



187 



1,516 



$11,768,000 



32 



iU 



Table 11-3 



Columbus SMSA estimated direct economic effects of examined institutions 



Total 



Percent 
of total 
direct 
spending 



Single institution 
Lowest Highest 



Local institution expenditures 
for goods and services 

Employee salaries and wages 

Local audience spending (other 
than ticket price) 

Sole-reason visitor spending 

Guest artist spending 



$1,525,012 24% 

$2,045,981 32% 

$1,669,070 26% 

$ 964,368 15% 

$ 132,390 2% 



$42,800 
$54,325 

$61,577 
$ 5,933 
$ 



$618,158 
$743,574 

$663,800 
$602,381 
$116,100 



Total 



$6,336,821 



99% 



33 



Table 11-4 



Columbus SMSA estimated audiences and spending by examined institutions 



Institution 



Audience 




Nonlocal 








(sole 


Institution 


Local 


Nonlocal 


reason) 


total 


22,178 


3,610 


. 2,244 


25,788 


159,050 


53,016 


13,996 


212,066 


201,763 


47, 327 


41, 832 


249,090 


71,412 


11,625 


3,238 


83,037 


101,670 


7,653 


5, 248 


109, 323 


18,831 


785 


412 


19,616 



Ballet Metropolitan 

Center of Science and Industry 

Columbus Association for the 
Performing Arts 

Columbus Museum of Art 

Columbus Symphony Orchestra 

Players Theatre of Columbus 



Total 



574,904 



124,016 



66,970 



698,920 



34 



Audience spending 



Local 



Nonlocal 



Nonlocal 
(sole 
reason) 



$ 63,651 
$ 324,462 



$ 176,592 
$2,593,414 



$ 32,314 
$201,542 



$ 663,800 

$ 195,669 

$ 359,911 

$ 61,577 



$2,315,122 
$ 568,667 
$ 374,366 
$ 38,400 



$602,381 
$ 46,627 
$ 75,571 
$ 5,933 



$1,699,070 



$6,066,561 



$964,368 



Guest artist spending . Each year, cultur- 
al institutions contract with nonresident 
designers, directors, conductors, featured 
soloists, and touring groups. These non- 
resident "guest artists" were reported to 
have spent a total of $132,390 locally. 
No attempt has been made to estimate spend- 
ing by guest artist entourage. 

Audience spending . Decisions regarding 
the handling of audience data can have a 
major impact on economic effect estimates. 
This study's conservative approach was to 
include the ancillary spending of visitors 
only if attendance at the arts event was 
tneir sole reason for oeing in the commun- 
ity. This protocol is discussed in Chapter 
I. At some institutions, however, sole- 
reason visitors are only a small percent- 
age of total visitor attendance and spend- 
ing. Many visitors indicated that they 
had planned ahead of time to attend a 
cultural activity although that was not 
the sole reason for their visit. Table 
II-4 presents a summary of audience data 
for Columbus. 



35 



Table 11-5 



Columbus SMSA audiences of examined institutions by residence and spending 



.-.verage :;r 
all insnituric: 



Single institution range 
Lowest Highest 



Audience residence 
In Columbus 

Outside Columbus but in SMSA 

Outside SMSA 



47. 3% 
35.0% 
17. ~h 



43.9% 

31.2% 

4.0% 



53.6% 
42.4% 
24.9% 



Audience spending 

Percent of local audience reporting 

Per capita spending 

Sole-reason nonlocal audience per 
capita spending 

Not scle-reason nonlocal audience 
per capita spending 



72.0% 



S 2.90 



S14.40 



$39.44 



53.0% 
$2.04 



80.0% 
$3.54 






* 



*Due to small sample sizes, analysis cf nonlocal audience 
data was not conducted bv individual institutions. 



2£ 



An estimated 124,016 visitors from outside 
the SMSA attended the examined institutions 
during fiscal 1978. They comprised from 4 
percent to 24.9 percent of total attendance , 
depending on the institution. Of these 
visitors, 66,970 are estimated to have vis- 
ited Columbus specifically to attend the 
institutions under study. 

As seen in Table II-5, local audiences 
spent sums ranging from an average of $2.04 
to S3. 54 per person for items such as meals 
and parking. During fiscal 1978, local 
audiences are conservatively estimated to 
have spent about $2.90 per capita, or 
$1,669,070 over and above admission fees. 

As shown in Table II-6, many other visitors 
expected to attend while visiting Columbus, 
but it was not their sole reason. Visitors 
from outside the SMSA are of special inter- 
est inasmuch as their spending represents 
"new" dollars, money which had not been in 
the community until that time. Across all 
examined institutions , nonlocal sole-reason 
visitors traveled a mean of sixty-three 
miles and reported per capita expenditures 
of $14.40, resulting in total expenditures of 
$964,368 that, can be conservatively attri- 
buted to the drawing power of the examined 



cultural activities . Persons for whom at- 
tendance at the cultural institutions was 
not the sole reason for visiting the com- 
munity traveled a mean of sixty-eight miles 
and spent $89.44 per capita, totaling 
$5,102,194. One reason for this large dif- 
ference is that in the sole-reason group 
only 5 percent stayed at hotels for a mean 
of 0.26 nights, whereas in the non-sole- 
reason group 19 percent stayed at hotels 
for a mean of 4.06 nights. 



Table 11-6 



Columbus SMSA nonlocal audiences by examined institutions 



Institution 



Ballet Metropolitan 

Center of Science and Industry 

Columbus Association for the 
Performing Arts (Ohio Theatre) 

Columbus Museum of Art 

Columbus Symphony Orchestra 

Players Theatre of Columbus 





Nonlocal 


Proportion 


Proportion 


Audience 


proportion 


of nonlocal 


of nonlocal 


s amp 1 e 


of total 


who expected 


who were 


size 


audience 


to attend 


sole-reason 


497 


14.1% 


85.2% 


62.3% 


516 


24. 9% 


60.2% 


26.6% 


531 


18. 8% 


93.6% 


88.5% 


369 


13. 8% 


70.2% 


27.7% 


504 


7. 2% 


89.3%* 


67.9%* 


476 


4. 0% 


88.2%* 


52.9%* 



*Because of relatively small nonlocal audience, 
these data should be treated with caution. 



37 



Table 11-7 



Columbus SMSA 
estimated secondary 
economic effects 
of examined institutions 



Secondary economic effects 



Secondary business volume 
generated by institution- 
related direct effects 

Secondary personal incomes 
generated by institution- 
related direct effects 
(excluding $2,045,981 in 
salaries to organizational 
employees ) 

Secondary full-time jobs 
in the Columbus SMSA 
attributable to institution- 
related direct effects 
(excluding 123 full-time 
organizational employees) 

Initial expansion of the 
local credit base 

Current value of backup 
inventory, equipment, 
and property 



$10,539,968 



$ 4,044,301 



574 



$ 3,221,487 



$ 4,442,864 



Direct-effect s 
effects when th 
ditures within 
respent by loca 
study estimates 
effects of inst 
197 8. Respendi 
duced into the 
to result in $1 
ary business vo 
estimated $4,04 
to employees . 
sents 574 full-t 



pending leads to secondary 
e institution-related expen- 
the community are in turn 
1 firms and households. The 

the level of five secondary 
itution-related spending in 
ng of initial dollars mtro- 
local economy is estimated 
0,539,968 in local second- 
lume . Of this amount, an 
4,301 is paid out in wages 
This personal income repre- 
ime jobs in the Columbus SMSA. 



Add it 

pansi 

depos 

insti 

local 

tion- 

mated 

balan 

and c 

When 

serve 

expan 

$3,22 



ional s 
on of t 
its in 
tutions 

busine 
related 

that i 
ces in 
hecking 
reduced 

requir 
sion of 
1,487. 



econdary e 
he local c 
local bank 
, their em 
sses benef 

direct ef 
n fiscal 1 
business a 

accounts 

by federa 
ements , th 

the credi 



ffects include an ex- 
redit base due to 
s by the examined 
ployees, and the 
iting from institu- 
fects. It is esti- 
978 average monthly 
nd employee savings 
totaled $3,419 ,777. 
1 and state cash re- 
is allows an initial 
t base totaling 



Finally, area firms be 
tution-related direct 
iness activity are est 
invested $4,442,864 in 
and equipment in suppo 
volume. This represen 
value of these assets, 
made in fiscal 1978; a 
may, however, have bee 
year. Expenditures we 
made with local firms, 
estimates for each of 
discussed above. 



nefiting from insti- 
and secondary bus- 
imated to have 

plant, inventory, 
rt of this business 
ts the fiscal 1978 
not expenditures 
portion of the assets 
n acquired in that 
re not necessarily 

Table II-7 presents 
the secondary effects 



Table 11-8 



Columbus SMSA examined institutions by sources of government support 



n- 

e 

ry 
n 
o- 



Iiistitution 






Ballet Metropolitan 

."Vi»fe-.- o 
'■&&;; ''■''' 

Center of Science and 
industry 

Columbus Association 
for the Performing Arts 
(Ohio Theatre) 

Columbus Museum of Art 

Columbus Symphony 
Orchestra 

Players Theatre of" 
Columbus 



Federal 



State 



$ 1,375 



$ 50,000 
$ 70,500 



$ 7,300 



$23,800 

$27,328 

$29,550 
$ 6,100 



Local 



$ 3,000 
$30,000 

$ 6,000 
$32,350 

$12,695 

$ 4,282 



Total 



$ 11,675 
$ 30,000 

$ 29,800 
$109,678 

$112,745 

$ 10,382 



Total 



$121,875 



$94,078 



$88,327 



$304,280 



Government revenues and expenditures 

In addition to estimating the direct and 
secondary effects on businesses and indi- 
viduals attributable to the examined in- 
stitutions, this study has sought to estimate 
the effect on local Columbus government rev- 
enues and expenditures in fiscal 1978. Local 
governmental revenues examined include 
real estate taxes paid to metropolitan 
area jurisdictions by the examined insti- 
tutions and their employee households , as 
well as a portion of property taxes paid 
by businesses benefiting from institution- 
related direct effects. Estimates were 
also made of local sales and income tax 
revenues attributable to institution- 
related direct effects. Additional govern- 
mental revenues identified include local 
hotel taxes, gasoline taxes, and parking 
revenues . 

Estimates of costs to local governments 
in the Columbus SMSA are based on esti- 
mates of local governmental operating 
costs associated with the provision of 
services to employee households including 
the cost of public instruction for ho.use- 
holds with children in the public schools. 
(No estimate has been made of the costs 
associated with services to the institu- 
tions themselves.) Government expenditures 
in support of the examined institutions 



included grants, operating subsidies, and 
service contracts; they are presented in 
Table II-8. Foregone property taxes are 
estimated at $171,391 in fiscal 1978. 



39 



Table 11-9 



Columbus SMSA 

estimated revenues and costs 

to local government 

related to examined institutions 



Revenues 



Real estate taxes paid 
by institutions, employees, 
and business property 
serving them 

Locally retained sales 
tax on institution- 
related business volume 

Local income tax revenues 
attributable to institu- 
tional employees and their 
households 

State aid to local govern- 
ments attributable to 
institutional employee 
households 

Hotel taxes 

Gasoline tax 

Parking revenues, estimated 



Total 



Costs 



$221,585 



$ 5,521 



$ 51,215 



$ 11,898 

$ 2,251 

$ 4,948 

$ 83,833 



$381,251 



Operating costs of local 
governments and schools 
for services to employee 
households 

Grants to study institutions 



$157,022 
$ 88,327 



Table II-9 summarizes institut 
governmental revenues and cost 
as costs are local governmenta 
and fees for services. In rev 
II-9, bear in mind the limited 
this analysis. No information 
able by which to judge whether 
identified effects on business , 
and government are typical of 
universe of all Columbus area 
institutions. The tax effects 
specific to the examined mix of i 



ion-related 

s . Included 

1 grants 

iewing Table 
nature of 
is avail- 
or not the 
individuals , 

the broader 

cultural 
shown are 

nstitutions . 



Revenues to local government include real 
estate taxes and taxes on business prop- 
erty devoted to servicing the institutions. 
Income taxes, sales taxes, local hotel 
taxes, gasoline taxes, state aid to local 
governments, and parking revenues totaled 
$381,251 in local government revenues at- 
tributable to the examined institutions. 
An employee survey indicates that employ- 
ees at the examined institutions contribute 
to both costs and revenues of government. 
They live in the city of Columbus or else- 
where in Franklin County, and approximate- 
ly 38 percent of them pay taxes as home- 
owners; they report a total of twenty-five 
children in local public schools. 

Sales, income, and property tax estimates 
are undoubtedly conservative inasmuch as 
no estimate has been made of taxes paid 
by individuals benefiting from institu- 
tion-related secondary effects. In addi- 
tion, no attempt has been made to assess 
the incidental effects of institutional 
activities on surrounding taxable property 
values, which may be positive or negative. 
Finally, no attempt has been made to as- 
sess the governmental costs or benefits 
associated with the more subtle effects 
discussed in the overview. 

Costs to local government included operat- 
ing costs of local governments and schools 
and local government grants to the exam- 
ined institutions for a total cost to local 
government of $245,34 9. As noted above, 
this does not include additional costs 
that may be associated with specific gov- 
ernmental services to the examined insti- 
tutions . 



Total 



$245,349 



40 



CHAPTER III 



THE MINNEAPOLIS/ST. PAUL ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 



The following institutions in the Minne- 
apolis/St. Paul Standard Metropolitan 
Statistical Area or SMSA were selected for 
study by the Twin Cities Metropolitan Arts 
Alliance: 

Children's Theatre Company 

Chimera Theatre 

Cricket Theatre 

Guthrie Theatre 

Minneapolis Institute of Arts 

Minnesota Dance Theatre 

Minnesota Orchestral Association 

St. Paul Chamber Orchestra 

Walker Art Center 

The Science Museum of Minnesota 

These represent a range of organizational 
types and include some of the more well- 
known local institutions. Their selection 
resulted from locally initiated efforts 
to identify interested organizations. 

The examined activities repeatedly demon- 
strate the importance of committed groups 
and individuals in local cultural develop- 
ment. The successful completion of the 
Minneapolis/St. Paul project was due to 
the efforts of a number of persons, in- 
cluding the principal project staff of 
the Metropolitan Arts Alliance. William 
Driver, managing director of the Alliance, 
served as study director, also coordinat- 
or the day-to-day tasks. Dr. Julien L. 
Phillips assisted in the coordination of 
requisite audience studies. Other staff 
persons and volunteers who actively par- 
ticipated in the project are identified 
at the end of this report. 

Minneapolis/St. Paul institutions 

Chimera Theatre came into existence in 
1969 through the purchase of the remaining 
assets of the defunct Eastside Theatre. 
The Chimera Theatre held 29 performances 
in 1973-79 and also over fifty education- 
al classes. 

The Minnesota Dance Theatre and School was 
founded in 1961 as The Contemporary Dance 
Playhouse by choreographer and artistic 
director Loyce Houlton. It is now the lar- 
gest dance organization in the Midwest with 
twenty professional dancers, 3 , 600 students, 
and thirty dance works in repertoire. 

The Guthrie Theatre opened in 19 63, largely 
due to the efforts of Oliver Rea, Peter 



Minneapolis/St. Paul 
Standard Metropolitan 
Statistical Area (SMSA) 




Based on U S Depl. ol Commerce, Bureau ol the Census. 
Current Population Reports. Series P-26 



Zeisler, and Sir Tyron Guthrie, marking the 
start of the regional professional theatre 
movement. In 1979 the Guthrie presented 
a total of twenty-one performances and pre- 
sentations, and 473 workshops and classes. 

The Minneapolis Society of Fine Arts was 
established in 1883, and created the Minn- 
eapolis Institute of Arts (MIA) in 1915. 
The original museum building was completed 
in 1915; a new wing was added in 1927, and 
the building again expanded in 1974. Its 
current collection numbers over sixty thou- 
sand works of art and presents a broad range 
of community education programs. 



In 1961 the Moppet 
first full-time the 
Minnesota. In 1965 
came the Children's 
and in 1973 became 
polis Society of Fi 
and the Minneapolis 
sign) . In 1975* the 
fully independent. 



Players launched the 
atre for children in 
the Moppet Players be- 
Theatre Company of MIA, 
a member of the Minnea- 
ne Arts (along with MIA 
College of Art and De- 
theatre company became 



The St. Paul Chamber Orchestra was founded 
in 1967 and consists of twenty-six full- 
time professional musicians and two con- 
ductors . 

The Cricket Theatre was founded by Bill 
Semons in 1971. At the time of the study, 
the Cricket Theatre was operating out of 



41 



Table 111-1 



Minneapolis/St. Paul SMSA demographics 



Age (1977) 



Education (1970! 



18-24 
25-34 
35-49 
50 and over 



Median age 



14.6% 
18. 2% 
15. 7% 
21. 3% 



27.9 



Less than 5 years 

4 years of high school or more 

4 years of college or more 



Median education 



1.7% 
66.1% 
14.8% 



12.4 



a converted movie theatre in northeast Min- 
neapolis. Since then, it has moved into 
new quarters at the Hennepin Center for the 
Arts. The Cricket Theatre is dedicated to 
bringing new plays to the Minneapolis/St. 
Paul area. 

The Science Museum of Minnesota traces its 
beginnings to 1907 when a small group of St. 
Paul businessmen, headed by Charles W. Ames, 
met to discuss the "intellectual and scien- 
tific growth of St. Paul." Ames proposed 
a series of free lectures and Thomas Irvine 
pledged financial support. The St. Paul 
Institute of Arts and Letters was born, and 
later became The Science Museum of Minne- 
sota. In 1927 the museum moved to the 
Merriam mansion on Capitol Hill, and in 1965, 
needing new space , it moved into a new 
building at 30 East Tenth Street. In 1978 
The Science Museum opened its own new build- 
ing across the street on Wabasha. The Sci- 
ence Museum also maintains a planetarium 
and exhibit hall in the Minneapolis Public 
Library, Lee and Rose Warner Nature Center 
near Marine-on-the-St . Croix, and Metcalf 
Natural History Study Center at Afton. 

Walker Art Center began as a gallery that 
exhibited the extensive private collection 
of paintings and prints, begun in 1874, of 
Thomas Barlow Walker. In 1879 , Walker built 
the first public art gallery in the Midwest. 
By the 1920s the T. B. Walker Art Galleries 
had expanded to cover nearly a city block 
as the Walker Art Center, which was sup- 



ported by an annual operating grant from 
the T.B. Walker Family Foundation. Since 
by the 1970s many of Walker's descendants 
had left Minnesota, the art center was put 
under the control of a board of directors 
drawn from the Minneapolis/St. Paul com- 
munity. In 1976, the foundation transferred 
the bulk of the assets of the art center to 
the board of directors, which launched a 
major endowment fund drive. 

The Minnesota Orchestra was founded in 1903 
as the Minneapolis Symphony Orchestra. The 
ninety-five-member orchestra is world-re- 
nowned and currently presents a fifty-two- 
week season with performances in the Minne- 
sota cities of Minneapolis, St. Paul, St. 
Joseph, and Rochester. 

Minneapolis/St. Paul economy and the broader 
cultural community 

An examination of the economy and broader 
cultural community of the Twin Cities and 
SMSA of Minneapolis/St. Paul contributes to 
an understanding of the effects ascribed to 
the eight examined arts institutions. Table 
III-l presents market data such as Effec- 
tive Buying Income (EBI) , a measure of the 
buying power of households after govern- 
ment deductions for taxes, social insurance, 
and lesser items; it also shows age, edu- 
cation, population, and income information. 

The Minneapolis/St. Paul SMSA consists of 
Hennepin, Ramsey, Anoka, Dakota, Washing- 



42 



1'OC 



ulation (selected year; 



Household income (1977 



1960 
1970 
1975 
1977 



1,432,030 
1 ,965, 391 
2,010, 841 
2 ,042 ,900 



S3, 000-39,999 
S10, 000-314, 999 
$15,000-$24,999 
$25,000 and over 



17.1% 
37 .3% 
2 0.9% 



Population change 
1960-1970 

1970-1975 



2 3.0% 
3. 2% 



1977 median household income 

1969 median nousehold income 

Average annual change in 
per capita income 1969-74 



516,915 

$11,682 

7.7% 



ton, Wright, Scott, Carver, and Chisago 
counties in Minnesota and St. Croix county 
in Wisconsin. In this study, the terms 
"local," "the Minneapolis/St. Paul metro- 
politan area," "the Minneapolis/St. Paul 
region," and "Twin Cities SMSA" are used 
interchangeably to identify the Minneapolis/ 
St. Paul SMSA, and figures are for 197 8, 
unless otherwise specified. The 1978 pop- 
ulation of the nine Minnesota counties of 
the SMSA was estimated to be 2,063,770, 
and the SMSA business volume $22, 015, 371, 080. 

In 1977, the Twin Cities SMSA ranked fif- 
teenth in the nation in population with 
2,042,900, up from seventeenth in 1970 with 
1,965,391 ( Sales and Marketing Management , 
Vol. 121; No. 2, July 24, 1978, pp. 6-115). 

The history of the area dates to the late 
seventeenth century, when explorers passed 
through the site of St. Paul. By 1805 an 
unofficial treaty with the Sioux had been 
made. St. Paul was incorporated in 18 54, 
and Minneapolis was chartered as a city in 
1867. 



Minneapolis 
based on wa 
mills. St. 
center , par 
Banking and 
in St. Paul 
and shoes, 
flour milli 
primary whe 



' s first maj 
ter power: s 

Paul develo 
ticularly fo 

railroading 
, as did the 

Minneapolis 
ng center to 
at market. 



or industries were 
awmills and flour 
ped as a commercial 
r the fur trade . 

developed quickly 
manufacture of boots 

advanced from a 
become the country ' s 



Unless otherwise noted, the following in- 
formation is taken largely from the Greater 
Minneapolis Chamber of Commerce's publica- 
tion, Profile — Economic and Demographic 
Information on the Minneapolis/St. Paul 
Metropolitan Area (Fall, 1978). 

In 1976 there were 38,457 firms in the 
SMSA, of which 3,375 were involved in manu- 
facturing, 4,114 in wholesale trade, 9,769 
in retail trade, and 11,046 in services. 
Twenty-eight of the manufacturing firms, 
four of the retail firms, and fourteen of 
the service firms each employed more than 
one thousand people. In 1976, manufacturing 
accounted for 30 percent of the employed 
work force with services accounting for 
31.5 percent, retail trade 25.3 percent, 
and wholesale trade 10 percent. Fortune 

(May and June 1978) listed thirteen Twin 
Cities companies among its top 500 and 
eleven others in its second 500 industrial 
companies ranked by sales. Thirteen Twin 
Cities companies were listed by Fortune 

(July 1978) among the largest nonindustrial 
corporations in the nation. /Jell-known 
firms such as Control Data, Honeywell, 
Univac (Division of Sperry Rand) , 3M, Gen- 
eral Mills, and Pillsbury started here and 
continue to grow. In the past twenty-five 
years Control Data has grown from infancy 
to a corporation employing over ten thou- 
sand people locally. 

The growth of the electronics and related 
science industries in Minnesota has been 



spectacular. Early in 1955 there were 
eighty-nine sucn firms employing slightly 



over 26,000 people; 






/ the end o: 



6~ 



there were 159 companies employing over 
37,000 people, an employment growth of 237 
-ercenc. A recent study by the Minnesota 
Department cf Economic Development showed 
9 3,600 persons employed in the electronics 
related industries . 



others have helped make the 
cf the largest business 
Chicago and the West Coast, 
distribution center for the 
Minneapolis is also the 

headquarters for the Ninth Federal Reserve 

District Bank. 



These rirms ana 
Twin Cities one 
centers between 
The area is the 
upper M i dwe s t . 



Business is attracted to Minneapolis/St. 
Paul for several reasons, including its 
geographic location and transportation ser- 
vices. The Twin Cities area is the hub of 
the upper Midwest's transportation network 
and is served by ten passenger airlines, 
six barge lines, three interstate bus lines, 
six freight railroads and Amtrak , and over 
one hundred truck lines. Minneapolis/ St. 
Paul also has a strategic location at the 
head of navigation on the Mississippi River 
and the cort now handles in excess cf three 
million tons annually. The Twin Cities 
are the nation's seventh largest distribu- 
tion center and the third largest trucking 
distribution center, while the Minneapolis/ 
5t. Paul airport is ranked second nationally 
for remaining open year around — over seven 
million travelers pass through each year. 



Urban renewal projects, new of f ice build- 
ings , retail facilities, and shopping cen- 
ters have totaled over 5500 million in the 
last ten years. In 1971, four of the lar- 
gest office buildings were under construc- 
tion: the fifty-seven-story IDS Center, 
the tallest building between Chicago and 
San Francisco; the Federal Reserve Bank 
Building; the Midwest Plaza; and the Peavey 
Building. The twin- towered Hennepin County 
Government Center was completed in 1974. 
'under construction at the time of this study 
were the First Mir.neapolis-Hines Pillsbury 
Center, a two-towered complex housing the 
new Piiisbury world headquarters and the 
First National Bank of Minneapolis; North- 
western National 3ank ' s twenty million dol- 
lar computer center in the Gateway area; 
and Northwestern National Life Insurance 
Company's twenty-story companion tower to 
the company's home office building. Other 
companies expanding in the city include 
Honeywell, Lutheran Brotherhood, and Sears 
Roebuck and Company. In the spring of 1979, 
construction was expected to begin on the 
City Center prefect, a S120 million complex 
which will feature a new Donaldson's 
department store, shopping complex, hotel, 
and the Northwestern Bank Tower. 

The Twin Cities have also become a popular 
convention and tourism area. The 100,000- 
square-foot Minneapolis Exhibit Hall seats 
fourteen thousand people and there are 9,500 
seats in the adjoining main auditorium. In 
1977 Minneapolis was the site for 356 con- 
ventions bringing $54 million into the area. 



Industrial development in the Minneapolis 
metropolitan area continues at a ranid Dace . 



The cultural community includes thirty- 
seven art galleries, thirteen fine arts 



fable 111-2 



Minneapolis/St. Paul SMSA selected businesses related 
to arts and culture 



Businesses 



Number Emolovees Pavroll 



Television-radio enterprises 

Music and record stores 

Bookstores 

Photography stores 

Movie theatres (except drive-ins 



155 


381 


3 


8,479,000 


31 


711 


? 


5,651,000 


59 


279 


5 


1,575,000 


30 


221 


$ 


1,368 ,000 


50 


1,245+ 


C 


2,923,0004 



Total 



375 



3,33' 



$19,996,000+ 



44 



Table 111-3 



Minneapolis/St. Paul SMSA estimated direct economic effects of examined institutions 



Total 



Percent 
of total 
direct 
spending 



Single institution 
Lowest Highest 



Local institution expenditures 
for goods and services 

Employee salaries and wages 

Local audience spending (other 
than ticket price) 

Sole-reason visitor spending 

Guest artist spending 



$ 7,335,778 
$10,852,362 

$ 7,339,916 
$ 2,967,612 
$ 104,223 



2 6% 


$141,137 


38% 


$226,220 


26% 


$ 38,002 


10% 


$ 11,374 


* 


$ 



$1,622,068 
$1,969,802 

$1,777,701 
$1,111,746 
$ 35,991 



Total direct spending 



$28,599,891 



100% 



: Less than 1 percent 



museums and institutions, thirty-nine play- 
houses, and eighty-five movie theatres. 
There are a museum of natural historv, manv 
community and children's theatres, and fine 
libraries. Minneapolis/St. Paul is one of 
the six locations in the United States to 
host the Metropolitan Opera annually. 



The examined institutions 
from the many nonprofit a 
organizations in the Twin 
Although these ten may pe 
impact of various types o 
they do not represent the 
locally available commerc 
activities. It is clear 
ined institutions do not 
pact of the "cultural ind 
ample, 1970 census data s 
7,048 employed writers, a 
tainers in the Twin Citie 
ing individuals employed 
and other arts-related po 
Artists Live: 1970, Resea 



were selected 
rts and cultural 

Cities SMSA. 
rhaps typify the 
f institutions, 

full share of 
lal and nonprofit 
that the exam- 
exhaust the ind- 
ustry . " For ex- 
how a total of 
rtists, and enter- 
s SMSA, exclud- 
in art galleries 
sitions ( Where 
rcn Division Re- 



port # 5, Washington: National Endowment 
for the Arts, 1977; see list at back of 
this report) . Only 777 persons were em- 
ployed full time at the examined institu- 
tions. The yellow pages of the Twin Cities 
metropolitan area telephone directory list 
over 2,600 enterprises which can be con- 
sidered culture-related in the broadest 
sense. These range from music, art, and 
theatrical suooliers to book and record 



dealers, design firms, and commercial pho- 
tographers. Data on the impact of some 
elements of these cultural business sectors 
are available from the 1977 statistics in 
the U.S. Bureau of the Census County Busi- 
ness Patterns series. Table III-2 details 
various data on businesses used by the 
general public. 

Direct economic effects 

The direct economic effects of the examined 
institutions include local spending for 
goods and services, salaries and wages to 
local residents, and expenditures by guest 
artists and by local and nonlocal audiences. 
Table III-3 presents selected data on insti- 
tution-related direct economic effects 
during fiscal 1978. 

Local institutional expenditures for goods, 
services, and salaries . It is estimated 
that the examined institutions made 70 per- 
cent of their expenditures for goods and 
services with local vendors and that this 
totaled $7,335,778. The percentage of 
nonlabor expenditures made locally by the 
examined institutions ranged from 55 per- 
cent to 99 percent . An additional $10,852, 362 
was spent for salaries and wages to local 
households. No estimate has been made of 
the impact of additional earned and other 
income by institutional employee households ; 
in some cases it was as high as 20 oercent. 



45 



Table 111-4 



Minneapolis/St. Paul SMSA estimated audiences and spending by examined institutions 



Institution 



Audience 



Local 



Nonlocal 



Nonlocal 
(sole 
reason) 



Institution 
total 



Children's Theatre Company 124,027 13,781 

Chimera Theatre 111,497 7,117 

Cricket Theatre 29,742 2,2 39 

Guthrie Theatre 336,252 84,063 

Minneapolis Institute of Arts 369,000. 81,000 

Minnesota Dance Theatre 10,920 697 

Minnesota Orchestral Association 445,539 18,564 

St. Paul Chamber Orchestra 33,571 1,399 

The Science Museum of Minnesota 541,200 118,800 

Walker Art Center 388,076 47,964 



7,166 

629 

640 

42,032 

21,150 

430 

7,426 

455 

24,420 

7,849 



137,808 

113,614 

31,981 

420,315 

450,000 

11,617 

464,103 

34,970 

660,000 

436,040 



Total 



2,389,824 



375,624 



112,197 



2,765,44: 



46 



Guest artist spending . Each year, cultural 
institutions contract with nonresident de- 
signers, directors, conductors, featured 
soloists, touring groups, and others. These 
nonresident "guest artists" were reported 
to have spent a total of $104,223 locally. 
No attempt has been made to estimate spend- 
ing by guest artist entourage. 

Audience spending . Decisions regarding the 
handling of audience data can have a major 
impact on economic effect estimates. This 
study's conservative approach was to include 
the ancillary spending of nonlocal visitors 
only if attendance at the arrs event was 
their sole reason for being in the commun- 
ity. This protocol is discussed in Chapter 
I. At some institutions, however, sole- 
reason visitors are only a small percent- 
age of total visitor attendance and spend- 
ing. Many visitors indicated that they had 
planned ahead of time to attend, although 
that was not the sole reason for their 
visit. Table III-4 presents a summary of 
audience data for Minneapolis/St. Paul. 



An estimated 375,624 visitors from outside 
the SMSA attended the examined institutions 
during fiscal 1978. They comprised from 
4.2 percent to 20.5 percent of total atten- 
dance depending on the institution. Of 
these visitors, 112,197 are estimated to 
have visited the Twin Cities specifically 
to attend the institutions under study. 



Audience spending 



Local 



Nonlocal 



Nonlocal 

(sole 

reason) 



$ 264,178 
$326,686 
$.116,589 
$1,311,383 
? 970,470 
$ . 38,002 
$1,777,701 
$ 86,949 
$1,601,952 
$ 846,006 



$ 780,959 
$ 403,315 
$ 126,882 
$ 4,763,786 
$ 4,590,208 
$ 39,498 
$ 1,052,008 
$ 79,280 
$ 6,732,306 
$ 2,718,083 



$ 189,541 

$ 16,637 

$ 16,928 
$1,111,746 

$ 559,418 

$ 11,374 

$ 196,418 

$ 12,035 

$ 645,909 

$ 207,606 



$7,339,916 



$21,286,325 



$2,967,612 



47 



As seen in Table III-5, local audiences 
spent sums ranging from an average of $2 . 13 
to $3.99 per person per visit for items 
such as meals and parking. During fiscal 
1978, local audiences are conservatively 
estimated to have spent $7,339,916 over 
and above admission fees. 

As shown in Table III-6, many other visitors 
expected to attend while visiting the Twin 
Cities, but it was not their sole reason. 
Visitors from outside the SMSA are of special 
interest inasmuch as their spending repre- 
sents "new" dollars, money which had not 
been in the community until that time. 
Across all examined institutions, nonlocal 
sole-reason visitors traveled a mean of 
seventy-seven miles to attend and reported 
per capita expenditures of $26.45, result- 
ing in total expenditures of $2,967,610 
that can be conservatively attributed to 
the drawing power of the examined cultural 
activities. Persons for whom attendance 
at the cultural institutions was not the 
sole reason for visiting the community trav- 
eled a mean of seventy-three miles and spent 
$69.54 per capita, totaling $18,318,714. 



One reason for this large difference in 
expenditures is that in the sole-reason 
group 18 percent stayed at hotels for a 
mean of 0.77 nights, whereas in the non- 
sole-reason group 20 percent stayed at hotels 
for a mean of 4.29 nights. 



Table 1 1 1-6 



Minneapolis/St. Paul SMSA nonlocal audiences by examined institutions 



Institution 



Audience 

sample 

size 



Nonlocal 
proportion 
of total 
audience 



Proportion Proportion 

of nonlocal of nonlocal 

who expected who were 

to attend sole-reason 



Children's Theatre Company 4 61 

Chimera Theatre 6 38 

Cricket Theatre 64 6 

Guthrie Theatre 39 2 

Minneapolis Institute of Arts 427 

Minnesota Dance Theatre 4 50 

Minnesota Orchestral 

Association 1,013 

St. Paul Chamber Orchestra 9 31 

The Science Museum of Minnesota 828 

Walker Art Center 5 24 



10. 3% 
6.0% 
7. 3% 

20.5% 

17. 7% 
6.1% 

4. 3% 
4.2% 

18. 2% 
11.0% 



81.8% 
35.3% 
65.9% 
91.6% 
75.3% 
96.2%* 

88.6-s 
77.1% 
61.4% 
70.4% 



52.3% 

8.8% 
29.3% 

50.0% 
26.0% 
61.5%* 

40.0% 
31.4% 
20.7% 
16.7% 



*Because of relatively small nonlocal audience, 
these data should be treated with caution. 



49 



Table 111-7 



Minneapolis/St. Paul SMSA 
estimated secondary 
economic effects 
of examined institutions 



Secondary economic effects 



Secondary business volume 
generated by institution- 
related direct effects 

Secondary personal incomes 
generated by institution- 
related direct effects 
(excluding 510,852,362 in 
salaries to organization 
employees ) 

Secondary full-time ]obs 
in the St. Louis SMSA at- 
tributable to institution- 
related direct effects 
(excluding 777 full-time 
organizational employees) 

Initial expansion of the 
local credit base 

Current value of backup 
inventory, equipment, 
and property 



$57,211,537 



$21,720 ,604 



3,053 
$ 6 ,849,136 

$15,837,042 



Direct-effect spending leads to secondary 
effects when the institution-related expc 
ditures within the community are in turn! 
respenr by local firms and households. TirP 
study estimates the level of five secondary 
effects of institution-related spendinq 
1978. Respendmg of initial dollars int] 
duced into the local economy is estimated 
to result in $57 , 211 , 537 in local secondary 
business volume. Of this amount, an esti- 
mated $21,720,604 is paid out in wages ti 
employees . This personal income represei 
3,053 full-time jobs in the Minneapolis/ 
St. Paul SMSA. 



1 

-■y 

T«B 
larv 

* 

iry 

1 



* 



Additional secondary effects include an e 
pansion of the local credit base due to 
deposits in local banks by the examined 
institutions, their employees, and the 
local businesses benefiting from institu 
tion-related direct effects. It is esti 
mated that in fiscal 1978 average monthly 
balances in business and employee saving 
and checking accounts totaled $7,576,561 
When reduced by federal and state cash r 
serve requirements , this allows an initial 
expansion of the credit base totaling 
$6,849,136. 



i 

V 

■ 



Finally, area firms benefiting from insti 
tution-related direct and secondary busi- 
ness activity are estimated to have inve 
ed $15,837,042 in plant, inventory, and 
equipment in support of this business 
volume. This represents the fiseal 1978 
value of these assets, not expenditures 
made in fiscal 1978; a portion of the 
assets may, however, have been acquired 
in that year. Expenditures were not ne- 
cessarily made with local firms. Table 
III-7 presents estimates for each of the 
secondary effects discussed above. 

Government revenues and expenditures 



I 



I 

i 



In addition to estimating the direct and 
secondary effects on businesses and indi- 
viduals attributable to the examined instil 
tutions , this study has sought to estimat 
the effect on local Minneapolis/St. Paul 
government revenues and expenditures in f ilj 
cal 1978. 



50 



Table 111-8 



Minneapolis/St. Paul SMSA examined institutions by sources of government support 



Institution 



r ederai 



State 



jOcal 



Total 



Children's Theatre Company S 37,500 

Chimera Theatre 

Cricket Theatre S 7,500 

Guthrie Theatre $155,000 

Minneapolis Institute of Arts 5119,5 34 

Minnesota Dance Theatre S 16,152 

Minnesota Orchestra Association 5160,000 

St. Paul Chamber Orchestra 5 80,000 

The Science Museum of Minnesota 

Walker Art Center 5 214,245 



5 75,000 

S 14,000 
5117,285 

S107,450 
5 44,030 
5170,000 

5 67,795 

5 85,295 



5 5,000 
518,500 

5 6,000 



5 3,000 

530,000 

5 7.000 



5 120,500 

5 13,500 

S 21,5 00 

5 278,285 

5 226,984 

5 60,192 

5 338,000 

S 177,795 

5 306,540 



Total 



5789,941 



5680,855 



577,500 



51,548,296 



51 



1 



Table 111-9 



Minneapolis/ St. Paul SMSA 
estimated revenues and costs 
to local government 
related to examined institutions 



Revenues 



Real estate taxes paid 
by the arts institutions, 
their employees, and busi- 
ness property serving 
the institutions 

Admissions tax 

Local income tax revenues 
attributable to institu- 
tional employees and 
their nouseholds 

State aid to local govern- 
ments attributable to 
institutional employee 
households 

Transient lodging tax 

Gasoline tax 

Parking revenues, estimated 



Total 



Costs 



Operating costs of local 
governments and schools 
for services to employee 
households 

Grants to study institutions 



Total 



SI ,483,786 
S 171,101 



$ 195,710 

$ 7,148 

$ 31,576 

$ 246,019 



$2,135, 340 



$1,069,025 
$ 77,500 



21,146,525 



Estimates of costs to local governments i 
the Twin Cities area are based on estimate 
of local governmental operating costs as- 
sociated with services to employee house- 
holds, including the cost of public instruc 
tion for households with children in the 
public schools but excluding costs assoc- 
iated with services to the institutions 
themselves. Table III-9 summarizes insti 
tution-reiated governmental costs and rev 
enues. Included as costs are local gov- 
ernmental grants and fees for services. I 
reviewing Table III-9, the limited nature 
of this analysis should be kect in mind. 
No information is available by which to 
judge whether or not the identified ef- 
fects on business, individuals, and crov- 
ernment are tycical of the broader univer 
of Twin Cities area cultural institutions 
The tax effects shown are specific to the 
examined mix of institutions. 



I 

I 

1 

Pi 

I 

1 

I 

1 

:aDis 
>loyeel 
ie ex-j 



Revenues to local government include real 
estate taxes, taxes on business property 
devoted to servicing the institutions, ad 
mission taxes, local hotel taxes, gasolin 
taxes, state aid to local governments, and 
parking revenues. These totaled $ 2 , 1 35 , 340 
in local government revenues attributable 
to the examined institutions. An emp 
survey indicates that employees at the 
amined institutions contribute to both costs 
and revenues of government. They live in 
the Twin Cities or in Kennenin County, and 
approximately 37 percent of them pay taxes 
as homeowners; they report a total of 179 
children in local public schools. 

Sales, income, and property tax estimates 
are undoubtedly conservative inasmuch as 
no estimate has been made of taxes paid by 
individuals benefiting from institution- 
related secondary effects. In addition, 
no attempt has been made to assess the in- 
cidental effects of institutional activ- 
ities on surrounding taxable property val- 
ues, which may be positive or negative. 
Finally, no attempt has been made to assess 
the governmental costs or benefits associa- 
ted with the more subtle effects that may 
result from the arts, which are discussed 
in the overview. 

Costs to local government included operatinc 
costs of local governments and schools and 
local government grants to the examined in- 
stitutions for a total cost to local govern- 
ment of $1,146,525. As noted earlier, this 
does not include additional costs that mav 
be associated with specific governmental 
services to the examined institutions. 



52 



CHAPTER IV 



THE ST. LOUIS ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 



St. Louis 

Standard Metropolitan 

Statistical Area (SMSA) 



The following institutions in the St. Louis 
Standard Metropolitan Statistical Area or 
SMSA were selected for study by the Arts 
and Education Council of Greater St. Louis: 

St. Louis Art Museum 

St. Louis Conservatory and School 

for the Arts (CASA) 
St. Louis Symphony Orchestra 
Missouri Botanical Garden 
McDonnell Planetarium 
Loretto-Hilton Repertory Theatre 
Museum of Science and Natural History 
Dance Concert Society 

These represent a range of organizational 
types and include some of the more well- 
known local institutions. Their selection 
resulted from locally initiated efforts 
to identify interested organizations. 

The successful completion of the St. Louis 
project was due to the efforts of a number 
of persons, including the principal pro- 
ject staff of the Arts and Education Coun- 
cil. Richard Tombaugh, executive director 
of the Council, served as study director 
and Joseph Davis, of Resources Management, 
Inc., was responsible for coordinating the 
dav-to-day tasks. Other staff persons and 
volunteers who actively participated in 
the project are identified at the end of 
this report. 

St. Louis institutions 

CASA was founded in 1974 as the result of 
a merger between a college-level institute 
(the St. Louis Institute of Music) and an 
inner-city community school (the Community 
Music School) . In 1977-78 CASA had an en- 
rollment at four branches of more than 
1,200 students who received instruction in 
music, .voice, dance, drama, and art. 



The Mis sou 
the public 
sion of He 
The first 
States, it 
land displa 
tions. Th 
ical Garde 
or five bo 



ri Botanical Garden opened to 

in 1859, largely due to the vi- 
nry Shaw, a retired businessman, 
botanical garden in the United 

considers research, education, 
y to be its three primary func- 
e library at the Missouri Botan- 
n is considered among the top four 
tanical libraries in the world. 



The Dance Concert Society was founded in 
1966 to sponsor nationally and internation- 
ally acclaimed contemporary dance companies 
in performance. The society's scope has 



MADISON 



LOUIS 




ILLINOIS 



CLINTON 



EAST ST. LOUIS 
ST CLAIR 



Based on U.S. Dept ol Commerce. Bureau ol the Census. 
Cur rem Population Recoils. Series P-26 



widened recently to include the sponsor- 
ship of extended educational residencies 
of four or more companies each year. 

The Loretto-Hilton Center was opened by 
Webster College in 1966. The first pro- 
fessional theatrical company produced by 
Webster College incurred large debts, and 
was closed after four years of operation. 
The theatre reopened in 1971 as an inde- 
pendent nonprofit corporation under an 
arrangement that allows the theatre to use 
college-owned facilities. In addition to 
the main-stage program, this professional 
repertory theatre also produces a touring 
company that performs for students in ele- 
mentary and junior high schools, and for 
immobilized senior citizens. 

The St. Louis Symphony Orchestra, the na- 
tion's second oldest major orchestra, is 
ranked among the best in the United States . 
The symphony's permanent home is Powell 
Symphony Hall, formerly the St. Louis The- 
atre , remodeled in 1968. During the 1977- 
78 season there were fifty regular sub- 
scription concerts, fifteen pops concerts, 
ten special Christmas concerts, forty-five 
educational concerts for children and young 
adults, and a six-concert baroque orches- 
tra series, all held in Powell Hall. The 
symphony presented an additional fifty 
concerts in the area, and toured in thirty- 
one cities. 

The St. Louis Art Museum was founded in 
1907. I t is now a subdistrict of the 
Metropolitan Zoological Park and Museum 



53 



Table IV- 1 



St. Louis SMSA demographics 



Aoe (19 77: 



Education (1970 



18-24 
15-34 
35-49 
50 and over 



12. 2% 
15.6% 
16. 7% 
2 4.9% 



Less than 5 years 

4 years of high school or more 

4 years of college or more 



4 . 3 9 = 
4 8.0% \ 
10.1% 



Median age 



29. 7 



Median education 



11.7 



I 



District established in 1971 by an act of 
the Missouri State Legislature. The mu- 
seum is well-known for its galleries of 
primitive and pre-Columbian art. 

The Museum of Science and Natural History 
is another subdistrict of the Metropolitan 
Museum and was founded in 1972. 

The McDonnell Planetarium was financed by 
a 1956 bond issue, and opened to the pub- 
lic in 1963. Currently, the planetarium 
is also a subdistrict of the Metropolitan 
Zoological Park and Museum District. 

St . Louis economy and the broader cultural 
community 

An examination of the economy and broader 
arts community of the city and SMSA of 
St. Louis contributes to an understanding 
of the effects ascribed to the eight exam- 
ined arts institutions. Table IV-1 presents 
useful market data such as the Effective 
Buying Income (EBI) , a measure of the buy- 
ing power of households after government 
deductions for taxes, social insurance, 
and lesser items; it also shows age, edu- 
cation, population, and income information . 
The St. Louis SMSA consists of the city of 
St. Louis; the Missouri counties of Frank- 
lin, Jefferson, St. Charles, and St . Louis ; 
and the Illinois counties of Clinton, Mad- 
ison, Monroe, and St. Clair. In this study, 



the terms "local," " 
politan area," and " 
are used interchange 
St. Louis SMSA. In 
SMSA ranked twelfth 
population of 2,378, 
a 1.3 percent drop f 
St. Louis SMSA ranke 
lation of 2,410,884 
Book 1977 , U.S. Dept 
Bureau, pp. 578, 696 
ulation in 1978 was 
Bancshares) . 



the St. Louis metro- 
the St. Louis region" 
ably to identify the 
1977 the St. Louis 
in the nation with a 
000. This represented 
rom 1970, when the 
d tenth with a popu- 

( County and City Data jj 
. of Commerce, Census | 
) . The estimated dop- 
2 ,453 ,000 (Mark Twain 



Situated on the banks of the Mississippi 
River close to the mouth of the Missouri 
River, St. Louis was founded as a French 
fur-trading post in 1764. The town later 
passed into Spanish and finally American 
ownership. In the early nineteenth cen- 
tury, St. Louis became the primary stag- 
ing point for pioneers moving west. j 

The St. Louis business community had four- 
teen Forbes 500 firms listed (May 1978) for, 
sales, with twelve St. Louis firms in the 
top 500 for assets. Fortune (May/June 1978 
cited twenty St. Louis industrial firms 
among the nation's top one thousand in- 
dustries in 1977. 



I 



The area's industrial sector provides the 
greatest number of local jobs. In partic- 
ular, the automobile industry is a major 



I 



I 



54 



r 



Population (selected years 



Household income (1977) 



1960 

1970 
1975 
1977 



Population change 
1960-1970 

1970-1975 



2,060, 103 
2,410,884 
2, 366,542 
2, 378,000 



+12.4% 
-1.7% 



$8,000-$9,999 
$10,000-$14 ,999 
$15,000-$24,999 
$25,000 and over 



5.4% 
16.6% 
34.9% 
22.3% 



1977 median household income 

1969 median household income 

Average annual change in 
per capita income 1969-74 



$15,876 
$10,504 

7 .3% 



employer. At the time of this study, 
Chrysler Corporation and General Motors 
each employed more than five thousand per- 
sons , while Ford Motor Company and a motor 
vehicle parts corporation, A.C.F. Indus- 
tries, each employed more than three thou- 
sand. Electrical and energy-related com- 
panies were also major employers. Emerson 
Electric Company, Union Electric Company, 
Southwestern Bell Telephone Company, and 
Olin Corporation each employed more than 
five thousand persons, while McGraw-Edison 
Corporation employed more than three thou- 
sand. Other major employers included Fam- 
ous-Barr, Sears Roebuck and Company, Mc- 
Donnell-Douglas Corporation, Monsanto 
Company, and Washington University. In all , 
there were ninety-six organizations that 
each employed one thousand or more workers 
( Large Employers of Metro St. Louis 1979 , 
Business Information Center, St. Louis 
Regional Commerce and Growth Association) . 
The broad scope of arts activities avail- 
able in greater St. Louis is indicated by 
the large number of institutions, a total 
of 116, that belong to the Arts and Edu- 
cation Council of Greater St. Louis. These 
institutions range from music and theatre 
groups to a public radio station and a 
sculpture garden. The SMSA has ten col- 
leges and universities as well as five 
community colleges ( The Arts and Education 
Council of Greater St. Louis: 1977 Annual 



Report , St. Louis, Mo.) 



p 



The examxned institutions were selected 
from the many nonprofit arts and cultural 
organizations in the St. Louis SMSA. Al- 
though these eight may perhaps typify the 
impact of various kinds of institutions, 
they do not represent the full range of 
locally available commercial and nonprofit 
activities. It is clear that the examined 
institutions do not exhaust the impact of 
the "cultural industry." For example, cen- 
sus data for 1970 show a total of 5,765 
employed writers, artists, and entertain- 
ers in the St. Louis SMSA, excluding in- 
dividuals employed in art galleries and 
other arts-related positions ( Where Artists 
Live: 1970, Research Division Report #5 . 
Washington: National Endowment for the'Arts , 
1977; see list at the back of this report) . 
Only 510 persons were employed full time 
at the examined institutions. The yellow 
pacres of the St. Louis metropolitan area 
telephone directory list over one thousand 
enterprises which can be considered cul- 
ture-related in the broadest sense. These 
range from music, art, and theatrical sup- 
Dliers to book and record dealers, design 
firms, and commercial photographers. 

Data on the impact of some elements of 
these cultural business sectors are avail- 
able from the 1977 statistics in the U.S. 
Bureau of the Census County Business Pat- 
erns series. Table IV-2 details data on 
businesses used by the general public. 



Direct economic effects 

The direct economic effects of the exam- 
ined institutions include local spending 
for goods and services, salaries and wages 
to local residents, and expenditures by 
guest artists and by local and nonlocal 
audiences. Table IV-3 presents selected 
data on direct effects during fiscal 197 8 . 






Local institutional expenditures for goods , 
services, and salaries. 



that the examined instit 
percent of their expendi 
and services with local 
this totaled $5,248,714. 
of nonlabor expenditures 
the examined institution 
percent to 95 percent. 
$7,652,004 was spent for 
wages to local household 
has been made of the imp 
earned and other income 
employee households, whi 
stances was as high as 1 



It is estimated 
utions made 82 
tures for goods 
vendors and that 
The percentage 

made locally by 
s ranged from 43 
An additional 

salaries and 
s. No estimate 
act of additional 
by institutional 
ch in some m- 
5 percent. 



Guest artist spending . Each year, cultur- 
al institutions contract with nonresident 
designers, directors, conductors, featured 
soloists, touring groups, and others. These 
nonresident "guest artists" were reported 
to have spent a total of $119,576 locally. 
No attempt has been made to estimate spend- 
ing by guest artist entourage. 



Table IV-2 



St. Louis SMSA selected businesses related to arts and culture 



Businesses 



Number Employees Payroll 



Television-radio enterprises 

Music and record stores 

Bookstores 

Photography stores 

Movie theatres (.except drive-ins) 



16 


513 


$ 


4,531,000 


62 


413 


$ 


2,520,000 


35 


238 


$ 


1,338,000 


32 


208 


$ 


1,118,000 


46 


626 + 


$ 


2,251,000+ 



Total 



291 



1,998+ 



$11,758,000+ 



56 



Table IV-3 



St. Louis SMSA estimated direct economic effects of examined institutions 



Total 



Percent 
of total 
direct 
spending 



Single institution 
Lowest Highest 



Local institution expenditures 
for goods and services 

Employee salaries and wages 

Local audience spending (other 
than ticket price) 

Sole-reason visitor spending 

Guest artist spending 



$ 5,248,714 25% 

$ 7,652,004 37% 

$ 6,600,197 32% 

$ 1,290,134 6% 

$ 119,576 * 



$60,600 

$50,043 

$ 7,326 
$ 2,472 
$ 



$1,414,789 
$3,490,612 

$1,269,028 
$ 391,313 
$ 56,980 



Total 



$20,910,625 



100% 



r Less than 1 percent. 



57 



Table IV-4 



St. Louis SMSA estimated audiences and spending by examined institutions 



Institution 



Dance Concert Society 

Loretto-Hilton Repertory Theatre 

McDonnell Planetarium 

Missouri Botanical Gardens 

Museum of Science and 
Natural History 

St. Louis Art Museum 

St. Louis Conservatory and 
School for the Arts (CASA) 

St. Louis Symphony Orchestra 



Audience 



Local 



3,923 
118,726 
193,946 
194,596 

114,945 
574,221 

7,326 
783,289 



Nonlocal 



Nonlocal 

(sole 

reason) 



672 

6,249 

79,217 

119,268 

30,555 
212,383 

227 
58,957 



409 

1,590 
4,024 
7,383 

2,221 
11,936 

76 
12,033 



Institution 
total 



9,595 
124,975 
273,163 
313,864 

145,500 
786,604 

7,553 
842,246 



Total 



1,995,972 



507,528 



39,672 



2,503,500 



58 



Audience spending 



Local 



Nonlocal 



Nonlocal 
(sole 
reason) 



$ 26,769 

$ 455,908 

$ 647,780 

$ 646,059 



$ 98,990 
$ 920,519 
$11,669,189 
$17,568,967 



$ 13,301 

$ 51,707 

$ 130,860 

$ 240,095 



$ 132,187 
$1,269,028 
$ 7,326 



$ 4,500,954 
$31,285,424 
$ 33,439 



$ 72,227 
$ 388,159 
$ 2,472 



$3,415,140 



$ 8,684,757 



$ 391,313 



$6,600,197 



$74,762,239 



$1,290,134 



Audience spending . Decisions regarding 
the handling of audience data can have a 
major impact on economic effect estimates. 
This study's conservative approach was to 
include the ancillary spending of non- 
local visitors only if attendance at the 
arts event was their sole reason for being 
in the community. This protocol is discus- 
sed in Chapter I. At some institutions, 
however, sole-reason visitors are only a 
small percentage of total visitor atten- 
dance and spending. Many visitors indicated 
that they had planned ahead of time to at- 
tend a cultural activity although that was 
not the sole reason for their visit. Table 
IV-4 presents a summary of audience data 
for St. Louis. 

An estimated 507,528 visitors from, outside 
the SMSA attended the examined institutions 
during fiscal 1978. They comprised from 
2.6 percent to 3 8.4 percent of total at- 
tendance depending on the institution. Of 
these visitors, 39,672 are estimated to 
have visited St. Louis specifically to at- 
tend the institutions under study. 



59 



Table IV-5 



St. Louis SMSA audiences of examined institutions by residence and spending 



Average for 

all institutions 



Single institution range 
Lowest Highest 



Audience residence 
In St. Louis 

Outside St. Louis but in SMSA 
Outside SMSA 



1 7 . 6 % 
6 2.1% 
20. 31 



12.4% 

42.4% 

2.6% 



26.1% 
82.5% 
38.4% 



Audience spending 

Percent of local audience reporting 

Per capita spending 

Sole-reason nonlocal audience per 
capita spending 

Not sole-reason nonlocal audience 
per capita spending 



63.0% 

S 3. 31 

$ 32.52 
$157.04 



26.0% 

$1.00 

* 

* 



78.0% 
$4.36 

* 

* 



*Due to small sample sizes, analysis of nonlocal audience 
data was not conducted by individual institutions. 



60 



As seen in Table IV-5, local audiences 
spent sums ranging from an average of SI. 00 
to $4.36 per person per visit for items 
such as meals and parking. During fiscal 
1978, local audiences are conservatively 
estimated to have spent $6,600,197 over 
and above admission fees. 

As shown in Table IV- 6 , many other visitors 
expected to attend while visiting St. Louis, 
but it was not their sole reason. Visitors 
from outside the SMSA are of special in- 
terest inasmuch as their spending repre- 
sents "new" dollars, money which had not 
been in the community until that time. 
Across all examined institutions, nonlocal 
sole-reason visitors traveled a mean of 
eighty-two miles and reported per capita 
expenditures of $32.52, resulting in total 
expenditures of $1,290,134 that can be 
conservatively attributed to the drawing 
power of the examined cultural activities. 
Persons for whom attendance at the cultur- 
al institutions was not the sole reason 
for visitina the community traveled a mean 
of eighty miles and spent $157.04 per cap- 
ita, totaling $73,472,106. One reason for 
this large difference is that in the sole- 



reason group 22 percent stayed at hotels 
r or a mean of 0.63 niahts, whereas in the 
non-sole-reason crouo 29 percent stayed at 
hotels for a mean of 4.06 nights. 



(Table IV-6 



St. Louis SMSA nonlocal audiences by examined institutions 



Institution 



Audience 

sample 

size 



Nonlocal 
proportion 
of total 
audience 



Proportion 
of nonlocal 
who expected 
to attend 



Proportion 
of nonlocal 
who were 
sole-reason 



Dance Concert Society 

Lore t to- Hilton 
Repertory Theatre 

IcDonnell Planetarium 

Missouri Botanical Gardens 



837 

1,162 
225 
525 



6. 7% 

5.1% 
28.6% 
38.4% 



80.4% 

56.4%* 
37. 3% 
52.1% 



6.1%* 

25.5%* 
5.1% 
6.2% 



luseum of Science 
nd Natural History 

t. Louis Art Museum 



534 
364 



21.4% 
26. 8% 



53.6% 
66. 3% 



7.3% 
5.6% 



;t. Louis Conservatory and 






School for the Arts (CASA) 116 2.6% 


100. 0%* 


33.3%* 


«t. Louis Symphony Orchestra 728 7.3% 


67. 3%* 


20.4%* 


■ Because of relatively small nonlocal audiences , 






xithese data should be treated with caution. 






1 ' 61 







fable iV-7 



St. Louis SMSA 
estimated secondary 
economic effects 
of examined institutions 



Secondary business volume 
Generated by institution- 
related direct effects 

Secondary personal incomes 
generated by institution- 
related direct effects 
(excluding S7, 652, 004 in 
salaries to organizational 
employees ) 

Secondary full-time jobs 
in the St. Louis SMSA 
attributable to institution- 
related direct effects 
(excluding 510 full-time 
organizational employees) 

Initial expansion of the 
local credit base 

Current value of backup 
inventory, equipment, 
and property 



$42,246,030 



S15,399 , 16! 



2,005 
$ 6,058,120 

$12,445,444 



uuiiudi y 
ling inj 

: intro-l 



Secondary economic erfects I 

Direct-effect spending leads to secondary . 
effects when the institution-related expen-j 
ditures within the community are in turn j 
respent by local firms and households. The 
study estimates the level of five secondary 
effects of institution-related spend: 
1978. Respending of initial dollars 
duced into the local economy is estimated 
to result in S42,246,030 in local secondary 
business volume. Of this amount, an esti-l 
mated $15,899,168 is paid out in wages to J 
employees . This personal income represents 
2,005 full-time jobs in the St. Louis SMSA 

Additional secondary effects include an ex- 
pansion of the local credit base due to 
deposits in local banks by the examined 
institutions, their employees, and the 
local businesses benefiting from institu- 
tion-related direct effects. It is esti- ' 
mated that in fiscal 1978 average monthly 
balances in business and employee savings 
and checking accounts totaled $6,641,360. 
When reduced by federal and state cash re- 
serve requirements, this allows an initial 
expansion of the credit base totaling 
$6 ",058, 120. 



Finally , 
fiting f 
secondar 
to have 
ventory , 
business 
cal 1978 
ditures 
the asse 
in that 
cessaril 
IV-7 pre 
secondar 



in fiscal 197 

rom institutio 

y business act 

invested $12,4 

and equipment 

volume. This 

value of thes 

made in fiscal 

ts may, howeve 

year. Expendit 

y made with lo 

sents estimate 

y effects disc 



8 area firms bene- 
n-related direct and 
ivity are estimated 
45,444 in plant, in- 
in support of this 
represents the fis- 
e assets, not expen- 

1978; a portion of 
r, have been acquired 
ures were not ne- 
cal firms. Table 
s for each of the 
ussed above. 



Government revenues and expenditures 

In addition to estimating the direct and 
secondary effects on businesses and individ- 
uals attributable to the examined insti- 
tutions, this study has sought to estimate 
the effect on local St. Louis government 
revenues and expenditures in fiscal 1978. 
Local governmental revenues examined in- 
clude real estate taxes paid to metropoli- 
tan area jurisdictions by the examined in- 
stitutions and their employee households, as 
well as a portion of property taxes paid by 
businesses benefiting from institution-re- 
lated direct effects. Estimates were also 
made of local sales and income tax revenues 
attributable to institution-related direct 
effects. Additional governmental revenues 
identified include local hotel taxes, gas- 
oline taxes, and parking revenues. Govern- 
ment expenditures in support of examined 
institutions included grants , operating 
subsidies, and services contracts; these 
are presented in Table IV-8. No allowance 
is made for foregone property taxes . 



62 



Table IV-8 



St. Louis SMSA examined institutions by sources of government support 



Institution 



Federal 



State 



Local 



Total 



Dance Concert Society S 29,451 

Loretto-Hilton 

Repertory Theatre $ 55,000 

McDonnell Planetarium $ 

Missouri Botanical 

Gardens $ 

Museum of Science 

and Natural History $ 

St. Louis Art Museum $215,000 

St. Louis Conservatory 

and School for the Arts 

(CASA) $3 33,906 

St. Louis Symphony Orchestra $169,682 



$ 64,144 

$ 106,626 

$ 

$ 40,000 



S 31,730 

$ 17,300 
$ 770,947 



$ 

$ 115,000 

S 291,025 

S 40,000 

$ 538,225 
S2, 108, 372 

$ 

$ 232,376 



$ 30,000 

$ 276,626 
$ 291,025 

S 30,000 

$ 538,225 
$2,405,152 

$ 351,206 
$1,223,505 



Total 



$803,039 



$1,080,797 



$3,375,49: 



$5,259,334 



Fable iV-9 



St. Louis SMSA 

estimated revenues and costs 

io local government 

related to examined institutions 



Revenues 



Real estate taxes paid 
by the arts institutions, 
their employees, and busi- 
ness property serving them, 

Locally retained sales 
tax on institution- 
related business volume 



S 633,664 



$ 163,500 



Estimates of costs to local Governments in 
the St. Louis area are also Dased on esti- 
mates o^ local governmental operating 
costs associated with services to employee 
households, including costs of public in- 
struction for housenolds with children in 
public schools but excluding costs associ- 
ated with services to the institutions 
themselves. Table IV-9 summarizes institu- 
tion-related governmental costs and revenue 
Included as costs are local governmental 
grants and fees for services. In review- 
ing Table IV-9, the limited nature of this 
analysis should be kept in mind. No infor- 
mation is available by which to judge 
•/nether or not the identified effects on 
business , individuals , and government are 
typical of the broader universe of all St. 
Louis area cultural institutions. The tax 
effects shown are specific to the examined 
mix of institutions. 



Local income tax revenues 
attributable to institu- 
tional employees 

State aid to local govern- 
ments attributable to 
institutional employee 
households 

Hotel taxes 

Restaurant tax 

Parking revenues, estimated 



Total 



Costs 



Total 



, 012 



S 134,400 

4,266 

$ 69,955 

$ 262 



$1,117,059 



Operating costs of local 
governments and schools 
for services to employee 
households 

Direct appropriations to 
three of the institutions 

Grants to study institutions 



$ 611,937 

$2,937,622 
S 437,876 



$3,987,435 



Revenues to local government include real 
estate taxes and taxes on business prop- 
erty, income taxes, sales taxes, local 
hotel taxes, gasoline taxes, restaurant 
taxes, state aid to local governments, 
and parking revenues. These totaled 
$1,117,059 in local government revenues 
attributable to the examined institutions. 
An employee survey indicated that employees 
at examined institutions contribute to both 
costs and revenues of government . They live 
in the city or the county of St. Louis; ap- 
proximately 4 6 percent of them pay taxes as 
homeowners; they report a total of 224 child- 
ren in local public schools. 

Sales, income, and property tax estimates 
are undoubtedly conservative inasmuch as 
no estimate has been made of taxes paid 
by individuals benefiting from institu- 
tion-related secondary effects. In addi- 
tion, no attempt has been made to assess 
the incidental effects of institutional 
activities on surrounding taxable prop- 
erty values, which may be positive or 
negative. Finally, no attempt has been 
made to assess the governmental costs or 
benefits associated with the more subtle 
effects discussed in the overview. 

Costs to local government included oper- 
ating costs of local governments and 
schools, local government grants to the 
examined institutions, and direct appro- 
priations for a total cost to local govern 
rr.ent of $3,987,435. As noted earlier , this 
does not include additional costs that may 
be associated with specific governmental 
services to the examined institutions. 



CHAPTER V 



THE SALT LAKE CITY ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 



Salt Lake City 
Standard Metropolitan 
Statistical Area (SMSA) 



The following institutions in the Salt 
Lake City Standard .Metropolitan Statistical 
Area or SMSA were selects 
Utah Arts Council: 



=1= 



for study by the 



Ballet West 

Pioneer Memorial Theatre 

Repertory Dance Theatre 
Salt Lake Art Center 
Theatre 13 3 
Tiffany's Attic 
Utah Museum of Fine Arts 
Utah Symphony 
Utah Opera Company 
Ririe-Woodbury Dance Company 

These represent a range of organizational 
types and include some of the more well- 
known local institutions. Their selection 
resulted from locally initiated efforts 
to identify interested organizations. 

The successful completion of the Salt Lake 
City project was due to the efforts of a 
number of persons, including the principal 
project staff of the Arts Council. Ruth 
Draper, director of the Council, served 
as study director and John M. Garbett, a 
graduate student at the University of Utah 
and an intern at the Council, was respon- 
sible for coordinating the day-to-day tasks . 
M. Kristin Wallengren Garbett helped super- 
vise the audience surveys. Other staff 
persons and volunteers who actively par- 
ticipated in the project are identified 
at the end of this report. 

Salt Lake City institutions 



Ballet West w 
Civic Ballet 
Mrs. John M. 
in the Capito 
pheum) , which 
The Capitol p 
ance faciliti 
Dance Theatre 
Company. The 
performances 



as founded in 19 6 3 as the Utah 
by William F. Christensen and 
Wallace. The ballet performs 
1 Theatre (the restored Or- 

reopened October 18, 1978. 
rovides office and perform- 
es for Ballet West, Repertory 
, and Ririe-Woodbury Dance 

1978-79 season included 120 
bv thirty-nine dancers. 



The Repertory Dance Theatre was formed in 
1965 as the result of a partnership be- 
tween the Rockefeller Foundation and the 
University of Utah. In 1977, the univer- 
sity terminated its- financial liability 
with all organizations and activities not 
involved in full-time, in-class teaching . 
The organization's founder, the late Vir- 
ginia Tanner, also founded Salt Lake City ' s 




X5EL 



Basea on u S Deoi o< Commerce- Su'eau o: ine Census. 
Current Population Reoorts Series P-26 



Children's Dance Theatre. This profes- 
sional modern dance company has a reper- 
toire of over one hundred pieces. 



The Utah Oper 
largely due t 
son of Utah, 
The company p 
The 1978-79 s 
ductions with 
pany ' s opera- 
free operatic 
fifty schools 



a Company was founded in 1976, 
o the initiative of a native 
the tenor Glade Patterson, 
erforms in the Capitol Theatre, 
eason consisted of three pro- 
twelve performances . The com- 
in-the-schools program involved 
programs in approximately 
throughout the state. 



Pioneer Memorial Theatre grew out of the 
University of Utah's Theatre Department 
in 1962 under the chairmanship of Dr. C. 
Lowell Lees. It is housed on the campus 
of the university and presents approxi- 
mately 120 performances a year, utilizing 
the talents of some four hundred artists. 
Each year one of its productions tours 
throughout Utah. The Children's Theatre 
Season, consisting of four plays, is also 
presented annually. 

The Utah Symphony opened its fortieth sea- 
son in September 1979, with concerts in- 
augurating its new ten-million-dollar home, 
Symphony Hall. The orchestra presents over 
two hundred concerts each season, and under 
the direction of maestro Maurice Abravanel , 
grew from an obscure ensemble to one of 
the country's major symphony orchestras. 



03 



Table V-1 



Salt Lake City SMSA demographics 



Age (19 7 7! 



Education (1970) 



13-24 
25-34 
35-49 
50 and over 



13.8% 
15.8% 
14.7% 
IS. 9% 



Less than 5 years 

4 years of high school or more 

4 vears of college or more 



1.8% 

6 8.5% 
15.0% 



Median age 



24. 7 



Median education 



12. 5 



The Salt Lake Art Center opened its doors 
in 1933 in the Salt Lake Art Barn, a struc- 
ture developed through the donated design 
and construction efforts of individual 
artists, community members, and the Salt 
Lake City Corporation. In May 1979 the art 
center moved into new quarters in downtown 
Salt Lake City next to Symphony Hall. The 
center presents forty to fifty changing 
exhibitions per year, half of which fea- 
ture Utah artists. It maintains a school 
offering approximately thirty profession- 
ally taught classes, and houses a sales 
shop where buyers may purchase works by 
Utah artists and craftsmen. It is the home 
of the Utah Media Center, a forum for film 
and video studies, and offers its space 
for other cultural programs including mu- 
sic, theatre, and dance. 

Theatre 138 was created in 1966 by three 
energetic individuals: Ariel Ballif, art- 
istic director; Tom Carlin, house manager; 
and Stewart Falconer, production manager. 
The theatre owns its building, located in 
downtown Salt Lake City, and presents 175 
to two hundred performances each year, 
employing nine to twelve artists for each 
performance. It is host to the Utah Arts 
Council's playwriting competition, offers 
a children's theatre workshop throughout" 
the year, and gives individual acting in- 
struction. Theatre 138 features a yearly 
operetta and an annual musical. With Utah 
Arts Council support, it offers a series 



producing new scripts by Utah playwrights. 
The Utah Museum of Fine Arts is the pri- 
mary cultural resource for the visual arts 
in the State of Utah. Founded in 1951, it 
moved into a new building on the campus of the 
University of Utah in 1970, and operates under 
the direction of E.Frank Sanguinetti. The 
museum Dresents a continuous series of 
temporary exhibitions which bring to the 
region treasures from other museums and 
private collections. These reinforce the 
museum's own collection which is always 
on view. Throughout the year, local and 
national performing artists perform in the 
museum's galleries and 420-seat auditorium. 
Chamber music series, poetry readings, film 
series, and dance concerts are included in 
its programming. The museum presents guided 
tours, gallery talks , and a docent training 
course. A series of fifteen to twenty trav- 
eling exhibitions from the museum's col- 
lections are available free of charge to 
schools, galleries, churches, libraries, 
and other nonprofit organizations. Selec- 
ted objects from the museum's collection 
are made available to Utah teachers for 
use in the classroom. ' 

The Ririe-Woodbury Dance Company was cre- 
ated in 1964 by co-directors Joan Woodbury 
and Shirley Russon Ririe. Throughout the 
year it presents some fifty formal con- 
certs and sixty lecture-demonstrations , in- 
cluding two home seasons at the Capitol 
Theatre in Salt Lake Citv. This modern 



oo 



Population (selected years 



Household income (1977) 



L960 
L970 
L975 
L977 



383,035 $8,000-$9 ,999 

705,458 $10,000-$14 ,999 

782,845 $15,000-$24,999 

823,200 $25,000 and over 



5.3% 
19.4% 
3 5.2% 
18.5% 



Population change 
.960-1970 

.970-1975 



+22. 4% 
+11.1% 



1977 median household income 

1959 median household income 

Average annual change in 
per cacita income 1959-74 



$15,886 
$ 9,952 

8.0% 



ance company offers narrated concerts, 
hildren's shows, demonstrations, narrated 
ommunity performances , choreography for 
hildren, teacher workshops, parent-child 
•orkshops , and production works-hops and 
eminars . 

ialt Lake economy and the broader cultural 
ommun-ity 

n examination of the economy and broader 
ultural community of the Salt Lake SMSA 
antributes to an understanding of the ef- 
ects ascribed to the ten examined insti- 
jtions. Table V-l presents useful market 
ata such as the Effective Buying Income 
SB I) , a measure of the buying power of 
juseholds after government deductions 
Dr taxes, social insurance, and lesser 

ems; it also shows income, age, education, 

id population information. 



ie Sale Lake Ci 
le Utah count ie 
ivis, and Weber 
.ocal," "the Sa 
litan area , " a 
tden region" ar 
entify the Sal 
7 3 the Salt La 
mated to have a 
ommunity Data 
pplied by the 
siness Researc 
It Lake City 



ty/Ogden SMSA consists of 
s of Salt Lake, Tooele, 
. In this study, the terms 
It Lake City/Ogden metro- 
nd "the Salt Lake City/ 
e used interchangeably to 
t Lake Ci ty/Ogden SMSA. In 
ke City/Ogden SMSA was es - 
total peculation of 839,600 
Inventory, information 
Bureau of Economic and 
h, University of Utah) . 
tself had an estimated 



population of 176,200 in 1977 ( Sales and 
Marketing Management , Vol. 121, No. 2, 
July 24, 1978, P.C.— 211). 

Salt Lake City is the state capitol of Utah 
and the seat of Salt Lake County. The city 
was founded in 184 7 by Brigham Young and 
approximately 1,700 settlers. Since the 
early 1900s, the local copper mines and 
the Geneva steel plant in Utah Valley have 
greatly contributed to the growth of metal 
fabricating industries. Other major in- 
dustries include food processing, printing 
and publishing , oil refining , the manufac- 
ture of clay products, radio equipment, 
electronics, and textiles. 

Salt Lake County alone contains twenty com- 
panies that employ over one thousand work- 
ers each and an additional' thirty firms 
that employ between five hundred and one 
thousand workers ( Major Non-Agricultural 
and Non-Governmental Employers , Salt Lake 
Area Chamber of Commerce, February 1979). 
In 1977 the county's civilian labor force 
numbered 254,400, with 27 percent in whole- 
sale and retail trade, 18 . 8 percent employed 
by governments, 17.6 percent in service and 
miscellaneous industries, 15.3 percent in 
manufacturing, 7.6 percent in transporta- 
tion, communication, and utilities, 6.1 
percent in financial and insurance compan- 
ies, 5.7 percent in construction, and 2.6 
percent in mining. Eighty-eight percent 
of the nonagricultural work force is un- 



affiliated with any union ( "Salt Lake Spec- 
trum," Salt Lake Area Chamber of Commerce, 
Dt. of Economic Development). 

It Lake City is the geographic center of 
e eleven western states, and is the hub 
of the interstate highway system, the west- 
ern railroad network, and the west's air 
traffic system. The area's transportation 
network has sixteen major trucking firms, 
four Class I railroads, and an internation- 
al airport servedbysix major airlines. 

Educational facilities include the Uni- 
versity of Utah with approximately 25 , 000 
students, the Utah Technical College, West- 
minster College, and Weber State College. 
Among cultural facilities are the Pioneer 
Museum, the Planetarium, the Natural His- 
tory Museum, and the Hogle Zoo, all located 
in Salt Lake City. Other cultural activi- 
ties available to residents and visitors 
range from chamber music recitals at the 
Utah Museum of Fine Arts to rock concerts 
at the twenty-million-dollar Salt Palace. 
The examined institutions were selected 
from the many nonorofit arts and cultural 
organizations in the Salt Lake City SMSA. 
Although these ten may perhaps typify the 
impact of various types of institutions , 
they do not represent the full range of 
locally available commercial and nonprofit 
activities. It is clear that the examined 
institutions do not exhaust the impact of 
the "culture industry." For examnle, cen- 



sus data for 1970 show a total of 1,585 
employed writers , artists , and entertain- 
ers in the Salt Lake City SMSA, excluding 
individuals employed in art galleries and 
other arts-related positions (Where Artists, 
Live: 1970, Research Division Report t5 , 
Washington: National Endowment for tne Art 
1977; see list at back of this report) . 
Only seventy-five persons were employed 
full time at the examined institutions. 
The yellow pages of the Salt Lake metrocol- 
itan area telephone directory list over one 
thousand enterprises which can be consid- 
ered culture-related in the broadest sense. 
These range from music, art, and theatrical 
suppliers to book and record dealers , 
design firms, and commercial photographers. 

Data on the impact of some elements of 
these cultural business sectors are avail- 
able from the 1977 statistics in the U.S. 
Bureau of the Census County Business Pat- 
terns series. Table V-2 details various 
data on businesses used by the general oublic . 

Direct economic effects 

The direct economic effects of the exam- 
ined institutions include local spending 
for goods and services, salaries and wages 
to local residents, and expenditures by 
guest artists and by local and nonlocal 
audiences. Table V-3 presents selected 
data on institutional direct effects dur- 
ing fiscal 1978 . 



I 



I 
■ 
I 
I 



Table V-2 



Salt Lake City SMSA selected businesses related to arts and culture 



Businesses 



Number Employees Payroll 



Television-radio enterprises 

Music and record stores 

Bookstores 

Photography stores 

Movie theatres (except drive-ins) 



36 


203 


$1,494,000 


35 


254 


$1,308,000 


15 


186 + 


$ N.A. 


7 


73 


$ 253,000 


41 


496 


$1, 388,000 



Total 



134 



1,212+ 



$4,943,000 



63 



Table V-3 



Salt Lake City SMSA estimated direct economic effects of examined institutions 



Total 



Local institution expenditures 
for goods and services 

Employee salaries and wages 

Local audience spending (other 
than ticket price) 

Sole-reason visitor spending 

Guest artist spending 



$1,804, 405 
$3,115, 024 

$ 749,467 
$ 381,491 
$ 30,110 



Percent 
of total 
direct 
spending 



30% 

51% 

12% 
6% 



Single institution 
Lowest Highest 



$11,486 
$14,100 

$ 5,933 
$ 4,375 
$ ■ 



$ 654,365 
$1,646,820 

$ 216,689 
$ 102,700 
$ 23,782 



Total 



$6,080, 497 



100% 



: Less than 1 percent, 



69 



Table V-4 



Salt Lake City SMSA estimated audiences and spending by examined institutions 



Institution 



Audience 



Local 



Nonlocal 



Nonlocal 

(sole 

reason) 



Institution 
total 



Ballet West 

Pioneer Memorial Theatre 

Repertory Dance Theatre 

Ririe-Woodbury Dance Company 

Salt Lake Arts Center 

Theatre 138 

Tiffany's Attic 

Utah Museum of Fine Arts 

Utah Opera Company 

Utah Symphony 

Total 



61,033 

95,880 

10,044 

12,555 

9,500 

7,493 

2,025 

60,520 

7,416 

50,528 

316,994 



8,323 

6,120 
756 
945 
500 
741 
475 

7,480 
824 

5,614 

31,778 



11,337 



69,356 

102,000 

10,800 

13,500 

10,000 

8,234 

2,500 

68,000 

8,240 

56,142 

348,772 



70 



Local institutional expenditures for goods , 
services, and salaries . It is estimated 
that the examined institutions made 60 per- 
cent of their expenditures for goods and 
services with local vendors and that this 
totaled $1,804,405. The percentage of non- 
labor expenditures made locally by the ex- 
amined institutions ranged from 30 percent 
to 97 percent. An additional 23,115,024 
was spent for salaries and wages to local 
households. No estimate has been made of 
the impact of additional earned and other 
income by institutional employee house- 
holds, which in some instances was almost 
25 percent. 

Guest artist spending . Each year, cultur- 
al institutions contract with nonresident 
designers, directors, conductors, featured 
soloists, touring groups , and others . These 
nonresident "guest artists" were reported 
to have spent a total of 530,110 locally. 
No attempt has been made to estimate spend- 
ing by guest artist entourage. 



Audience spending . Decisions regarding 
the handling of audience data can have a 
major impact on economic effect estimates. 
This study's conservative approach was to 
include the ancillary spending of nonlocal 
visitors only if attendance at the arts 
event was their sole reason for being in the 
cummunity . This protocol is discussed in 
Chapter I. At some institutions, however, 
sole-reason visitors are only a small per- 
centage of total visitor attendance and 
spending. Many visitors indicated that 
they had planned ahead of time to attend 
although that was not the sole reason for 
their visit. Table V-4 presents a summary 
of audience date for Salt Lake City. An 
estimated 31,778 visitors from outside 
the SMSA attended the examined institu- 
tions during fiscal 1978. They comprised 
from 5 percent to 18.9 percent of total 
attendance depending on the institution: 
Of these visitors, 11,337 are estimated 
to have visited Salt Lake City specifical- 
ly to attend the institutions under study. 



Audience spending 



Local 


Nonlocal 


Nonlocal 

(sole 

reason) 


$208,733 


$ 


652,902 


$102,700 


$216,689 




480,086 


$ 


75,511 


$ 29,128 


$ 


59, 305 


$ 


18,541 


$ 36,410 


$ 


74,131 


$ 


23,185 


$ 10,355 


$ 


39,223 


$ 


6,730 


$ 21,954 


$ 


58,128 


$ 


5,249 


$ 5,933 


$ 


37,262 


$ 


4, 375 


$ 56,284 


$ 


586,772 


$ 


41,188 


$ 20,987 


$ 


64,639 


$ 


13, 325 


$142,994 


$ 


440,393 


$ 


90,687 



$749,467 



$2,492,841 



$381,491 



/ i 



Table V-5 



Salt Lake City SMSA audiences of examined institutions by residence and spending 



Average for 

all institutions 



Single institution range 
Lowest Highest 



Audience residence 
In Salt Lake City 

Outside Salt Lake City but in SMSA 

Outside SMSA 



55.5% 

35.4% 

9.1% 



26.0% 


69.4% 


25.2% 


60.5% 


5.0% 


18.9% 



Audience spending 

Percent of local audience reporting 

Per capita spending 

Sole-reason nonlocal audience per 
capita spending 

Not sole-reason nonlocal audience 
per capita spending 



57.0% 
$ 2. 36 

$ 33.65 

$103.29 



25.0% 
$0.93 

* 

* 



*Due to sample small sizes, analysis of nonlocal audience 
data was not conducted by individual institutions. 



85.0% 
$3.42 

* 

* 



72 



As seen in Table V-5, local audiences scent 
sums ranging from an average of SO. 93 to 
$3.42 per person per visit for items such 
as meals and parking. During fiscal 1978, 
local audiences are conservatively esti- 
mated to have spent S749 , 467 over and above 
admission fees. 

As shown in Table V-6, many other visitors 
expected to attend while visiting Salt Lake 
City, but it was not their sole reason. 
Visitors from outside the SMSAareof spe- 
cial interest inasmuch as their spending 
represents "new" dollars, money which had 
not been in the community until that time. 
Across all examined institutions, nonlocal 
sole-reason visitors traveled a mean of 
sixty-three miles and reported per capita 
expenditures of $33.65, resulting in total 
expenditures of $381,491 that can be con- 
servatively attributed to the drawing 
power of the examined cultural activities . 
Persons for whom attendance at the cul- 
tural institutions was not the sole reason 
for visiting the community traveled a mean 
of sixty-one miles and spent $103.29 per 
capita, totaling $2,111,351. One reason 



for this large difference in expenditures 
is that in the sole-reason group 12 percent 
stayed at hotels for a mean . 80 nights , and 
in the non-sole-reason group 25 percent 
staved at hotels for a mean 6.49 niahts . 



Table V-6 



Salt Lake City SMSA nonlocal audiences by examined institutions 



Institution 



Audience- 
sample 
size 



Nonlocal 
proportion 
of total 
audience 



Proportion 
of nonlocal 
who expected 
to attend 



Proportion 
of nonlocal 
who were 
sole-reason 



Ballet West 

Pioneer Memorial Theatre 

Repertory Dance Theatre 

Ririe-Woodbury Dance Company 

Salt Lake Arts Center 

Theatre 138 

Tiffany's Attic 

Utah Museum of Fine Arts 

Utah Opera Company 

Utah Symphony 



1,682 

1,330 
315 
N.A. 
161 
266 
291 
178 
N.A. 
879 



12.5% 
5.8% 
6.7% 
N.A. 
5.0% 
9.2% 
18. 9% 
10. 9% 
N.A. 
9.6% 



75.2% 

58.8% 
83.3%* 

N.A. 
60.0%* 
52. 6%* 
65.9% 
61.1%* 

N.A. 
66.7% 



36.4% 

37.3% 
72.2%* 

N.A. 
40.0%* 
21.1%* 
27. 3% 
16.7%* 

N.A. 
48. 3% 



♦Because of relatively small nonlocal audience, 
these data should be treated with caution. 



Table V-7 



Salt Lake City SMSA 
estimated secondary 
economic effects 
of examined institutions 



Secondary business volume 
generated by institution- 
related direct effects 

Secondary personal incomes 
generated by institution- 
related direct effects 
(excluding $3,115,024 in 
salaries to organizational 
employees ) 

Secondary full-time jobs 
in the Salt Lake City SMSA 
attributable to institution- 
related direct effects 
(excluding 75 full-time 
organizational employees) 

Initial expansion of the 
local credit base 

Current value of backup 
inventory, equipment, 
and property 



$9,978,282 



$3,876,184 



631 



$2, 970,735 



$2,408,853 



Secondary economic effects 

Direct-effect spending leads to secondary 
effects when the institution-related expen- 
ditures within the community are in turn 
respent by local firms and households. The 
study estimates the level of five secondary 
effects of institution-related spending in 
1978. Respending of initial dollars intro- 
duced into the local economy is estimated 
to result in $9,978,282 in local secondary 
business volume. Of this amount, an esti- 
mated $3,876,184 is paid out in wages to 
employees . This personal income represents 
631 full-time jobs in the Salt Lake City SMSA. 

Additional secondary effects include an ex- 
pansion of the local credit base due to 
deposits in local banks by the examined 
institutions , their employees , and the 
local businesses benefiting from institu- 
tion-related direct effects. It is esti- 
mated that in fiscal 1978 average monthly 
balances in business and employee savings 
and checking accounts totaled $3,169,229. 
When reduced by federal and state cash re- 
serve requirements, this allows an initial 
expansion of the credit base totaling 
$2,970,735. 

Finally, area firms benefiting from insti- 
tution-related direct and secondary busi- 
ness activity are estimated to have inves- 
ted $2,408,853 in plant, inventory, and 
equipment in support of this business vol- 
ume. This represents the fiscal 1978 
value of these assets , not expenditures 
made in fiscal 1978; a portion of these 
assets may, however, have been acquired in 
that year. Expenditures were not neces- 
sarily made with local firms. Table V-7 
presents estimates for each of the secon- 
dary effects discussed above. 

Government revenues and expenditures 



In addition 
secondary e 
viduals att 
institution 
imate the e 
institution 
ues as seen 
Research on 
impact data 
arts and cu 
al units of 
tropolitan 
"Regional C 
Institution 
Review, Vol 



to estimating the direct and 
ffects on businesses and indi- 
ributable to the examined 
s, this study has sought to est- 
ffect on local Salt Lake City 
s supported by government reven- 

in Table V-8 in fiscal 1978. 

the implications of economic 

for regional cost-sharing of 
ltural institutions by the sever- 

government that comprise a met- 
area can be found in David Cwi ' s 
ost-Sharing of Arts and Cultural 
s , " Northeast Regional Science 
. 9, 1979. 



74 



Table V-8 



Salt Lake City SMSA examined institutions by sources of government support 



Institution 



Federal 


State 


Local 


To 


tal 


$ 67,000 


$'. 


.94,200 


S 


32,800 


$ 


294,000 


$ 12,000 


$ 


80,000 


$254,000 


$ 


346,000 


$ 24,480 


s 


45,000 


$ 


14 ,362 


$ 


33,842 


S 66,110 


s 


40,230 


$ 


4 , 000 


$ 


110,340 


$ 15,000 


s 


26,000 


$ 


7,500 


$ 


48,500 


$ 700 


s 


8,200 


$ 





s 


8,900 


N.A. 




N.A. 




N.A. 




N.A. 


N.A. 




N.A. 




N.A. 




N.A. 


S — 


s 


37,000 


$ 


2,800 


$ 


39,800 


$515,000 


$375,000 


S 


70,000 


$ 


960,000 



Ballet West 

Pioneer Memorial Theatre 

Repertory Dance Theatre 

Ririe-Woodbury Dance Company 

Salt Lake Arts Center 

Theatre 138 

Tiffany's Attic 

Utah Museum of Fine Arts 

Utah Opera Company 

Utah Symphony 



Total 



$700,290 



$883,930 



$385,462 



$1,891,382 



75 



Table V-9 



Salt Lake City SMSA 
estimated revenues and costs 
to local government 
related to examined institutions 



Revenues 



Real estate taxes paid by 
the institutions, their 
employees, and business 
property serving them 

Locally retained sales 
tax on institution- 
related business volume 



$306,794 



$ 26,755 



Estimates of costs to local governments in 
the Salt Lake City area are based on esti- 
mates of local governmental operating costs 
associated with services to employee house- 
holds, including the cost of public in- 
struction for households with children in 
the public schools, but excluding costs 
associated with services to the institu- 
tions themselves. Table V-9 summarize in- 
stitution-related governmental costs and 
revenues. Included as costs are local 
governmental grants and fees for services . 
In reviewing Table V-9 , the limited nature 
of this analysis should be kept in mind. 
No information is available by which to 
judge whether or not the identified effects 
on business , individuals , and government 
are typical of the broader universe of 
Salt Lake City area cultural institutions. 
The tax effects shown are specific to the 
examined mix of institutions. 



Local income tax revenues 
attributable to institu- 
tional employees 

State aid to local govern- 
ments attributable to 
institutional employee 
households 

Hotel taxes 

Parking revenues, estimated 



Total 



Costs 



$ 66,192 
$ 758 
$ 5,181 



$405,680 



Operating costs of local 

governments and schools 

for services to employee 

households $250,128 

Grants to 8 study institutions $385,462 



Total 



$635,590 



Revenues to local government include real 
estate taxes, taxes on business property 
devoted to serving the institutions , in- 
come taxes, sales taxes, local hotel taxes, 
state aid to local governments , and park- 
ing revenues. These totaled $405,680 in 
local government revenues attributable to 
the examined institutions. An employee 
survey indicates that employees at the 
examined institutions contribute to both 
costs and revenues of government. They 
live in the city of Salt Lake or in Salt 
Lake County, and approximately 54 percent 
of them pay taxes as homeowners; they re- 
port a total of 109 children in local pub- 
lic schools. 

Sales, income, and property tax estimates 
are undoubtedly conservative inasmuch as 
no estimate has been made of taxes paid 
by individuals benefiting from institution- 
related secondary effects. In addition, no 
attempt has been made to assess the inci- 
dental effects of institutional activities 
on surrounding taxable property values , 
which may be positive or negative . Finally, 
no attempt has been made to assess the gov- 
ernmental costs or benefits associated with 
the more subtle effects that may result 
from the arts, which are discussed in the 
overview. 



Costs to local government include operating 
costs of local governments and schools and 
local government grants to the examined 
institutions for a total cost to local gov- 
ernment of $635,590. As noted earlier, 
this does not include additional costs that 
may be associated with specific governmen- 
tal services to the examined institutions. 



76 



CHAPTER VI 



THE SAN ANTONIO ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 



San Antonio 
Standard Metropolitan 
Statistical Area (SMSA) 



The following institutions in the San 
Antonio Standard Metropolitan Statistical 
Area or SMSA were selected for studv by 
the Arts Council of San Antonio: 

San Antonio Symphony 
San Antonio Opera 
Carver Cultural Center 
Witte Museum 
Museum of Transportation 

These renresent a range of organizational 
tyoes and include some of the more well- 
known local institutions. Their selection 
resulted from locally initiated efforts 
to identifv interested organizations. 



The successful c 
Antonio project 
a number of pers 
cipal project st 
Robert Canon, ex 
Council, served 
Nancy Broomall, 
director, was re 
ing the day-to-d 
persons and volu 
ticipated in the 
at the end of th 



ompletion 
was due to 
ons , mclu 
aff of the 
ecutive di 
as study d 
the Counci 
sponsible 
ay tasks . 
nteers who 
project a 
is report. 



of the 

the ef 

ding th 

Arts C 

rector 

irector 

1 ' s ass 

for coo 

Other 

active 

re iden 



San 

fort of 
e prm- 
ouncil . 
of the 

and 
istant 
rdinat- 
staff 
ly par- 
tified 



San Antonio institutions 

The Symphony Society of San Antonio con- 
sists of the San Antonio Symphony and the 
San Antonio Symphony Opera. The symphony 
was founded in 1939 and currently gives 
over 165 performances annually, including 
a subscription series of fourteen concerts , 
a pop series, a mastersingers series, a 
series of children's concerts, and three 
opera productions. 

The Carver Community Cultural Center opened 
in 1977. Constructed in 1929 and origi- 
nally called the Colored Library-Audito- 
rium, it was renamed the Carver Library 
Auditorium in 1938 and served the black 
community, but currently programs in the 
visual and performing arts are offered to 
persons of all cultural and socioeconomic 
backgrounds. Activities include workshops 
and lecture demonstrations to provide op- 
portunities for study and learning from 
the arts professions, classes and train- 
ing to stimulate local artistic expres- 
sion and creativity, and performances and 
exhibitions of professional artists and 
companies. The Carver Community Cultural 
Center is a division of the City of San 




Based on U S Deal, ol Commerce. Bureau ol me Census, 
Current Population Reports . Series P-26 



Antonio and all events are free to the 
public . 

The San Antonio Museum Association, es- 
tablished in 1923, opened its first fa- 
cility, the Witte Museum, in 1926. The 
Witte was originally devoted to displays 
of natural history and science but through 
the years it developed and acquired col- 
lections of art, archaeology, early Texas 
furniture and decorative arts, photography, 
transportation, and ethnic arts. A second 
facility, the San Antonio Museum of Trans- 
portation, opened in 1969. The museum as- 
sociation has been completing work on the 
San Antonio Museum of Art, an adaptive re- 
use of the former Lone Star Brewery indus- 
trial complex. The museum association also 
conducts educational, publications, and 
community outreach programs . 



77 



Table VI-1 



San Antonio SMSA demographics 



Age (1977) 



Education (1970! 



18-24 
25-34 
35-49 
50 and over 



14. 8% 

14.2% 
15.4% 
21.1% 



Less than 5 years 

4 years of high school or more 

4 years of college or more 



13.6% 
46.8% 
10.2% 



Median age 



25.5 



Median education 



11.5 



San Antonio economy and the broader 
cultural community 



An examination of the economy and broader 
cultural community of San Antonio contrib- 
utes to an understanding of the effects 
ascribed to the five ' examined arts insti- 
tutions. Table VI-1 presents useful market 
data such as the Effective Buying Income 
(EBI) , a measure of the buying power of 
households after government deductions for 
taxes, social insurance, and lesser items; 
it also shows income, age, education, and 
population information. 



The San Antonio 
dard Statistica 
Bexar, Guadalup 
this study, the 
Antonio metropo 
Antonio region" 
to identify the 
the population 
with 708,582 re 
1977 SMSA popul 
996 ,800. 



Bureau of th 
1 Area (SMSA) 
e, and Comal 

terms "local 
litan area , " 

are used int 

San Antonio 
of the SMSA w 
siding in the 
ation was est 



e Census Stan- 
consists of 
counties . In 
," "the San 
and "the San 
erchangeably 
SMSA. In 19 7 
as 888,179, 
city. The 
imated to be 



San Antonio was founded on May 1, 1718 by 
a Spanish military expedition. After the 
Mexican revolution of 1821, San Antonio 
became a part of Mexico. In 1836 Texas de- 
clared its independence, and nine years later 
joined the United States. 

In the late 1800s, San Antonio was a ma jor 
cattle center, and the starting point of 
the famous Chisholm Trail. During and 
after World War II, San Antonio became a 



major military center with Fort Sam Hous- 
ton of the U.S. Army and four important 
U.S. Air Force bases. In 1978 these bases 
employed 43,489 military personnel and 
29,043 civilians; in addition, there were 
26,734 retired military personnel in the 
area ("Military Statistics: The Economic 
Impact on San Antonio 1978," Economic Re- 
search Dept. of the Greater San Antonio 
Chamber of Commerce). In April 1978, the 
employed civilian work force numbered 
376,200, including 93,500 working for fed- 
eral, state, and local governments; 6 8,900 
in retail and commercial trade; 68,200 in 
service industries; 45,750 in manufactur- 
ing; 23,850 in finance, insurance, and 
real estate; 23,750 in construction; 21,050 
in wholesale trade; and 15,250 in trans- 
portation, communications, and utilities 
("Business Barometer, May 1979," Economic 
Research Dept. of the Greater San Antonio 
Chamber of Commerce) . 

San Antonio remains the commercial and fi- 
nancial center for South Texas, and is 
served by four railroads, forty-four com- 
mon-carrier truck lines, a major highway 
system, two municipal airports with eleven 
scheduled airlines, and five bus lines ("San 
Antonio Facts," Economic Research Dept. 
of the Greater San Antonio Chamber of Com- 
merce, January 1, 19 79. Information in 
the' following two paragraphs also derived 
from this source) . Other cultural events 
attractive to residents and visitors in- 
clude Fiesta San Jacinto, Texas Folklife 
Festival, and San Antonio Livestock Expo- 
sition and Rodeo. 



78 



FoDulation (selected years) 



Household income (1977 



1960 

1970 
1975 
1977 



687,151 
888 ,179 
981,566 
996,800 



Population change 
1960-1970 

1970-1975 



20. 7% 
10.0% 



$8, 000- $9, 999 
$10, 000-$14, 999 
$15, CO0-$24, 999 
$25 , 000 and over 



7 .7% 
20.0% 
2 8.3% 
17.6% 



1977 median household income 

1969 median household income 

Average annual change in 
per capita income 1969-74 



$13,953 
$ 7,981 

8.2% 



79 



The examined institutions were selected 
from the many nonprofit arts and cultural 
organizations in the 3an Antonio SMSA . 
While these five ma ypify the impact of 
various types of institutions, they do 
not represent the full ranae of locally 
available commercial and nonprofit activ- 
ities. It is clear that the examined in- 
stitutions do not exhaust the impact of 
the ''culture industry." Tor example, cen- 
sus data for 1370 show a total of 1,979 
employed writers, artists, and entertainers 
in the San Antonio SMSA, excluding indi- 
viduals employed in art galleries and 
other arts-related positions ( Where Artists 
Live: 1970, Research Division Report #5, 



Washington : National Endowment for the Arts , 
j_977 ; se e list at the back of this report). 
There were sixty-one full-time employees 
at the examined institutions. The yellow 
pages of the San Antonio area telephone 
directory list 1,200 enterprises which can 
be considered culture-related in the broad- 
est sense. These range from music, art, 
and theatrical suppliers to book and record 
dealers, design firms, and commercial pho- 
tographers . 

Data on the impact of some elements of 
these cultural business sectors are avail- 



able from the 1977 statistics in the U.S. 
Bureau of the Census County Business Pat- 
terns series. Table VI-2 details various 
data on businesses used by the general public. 

Direct economic effects 

The direct economic effects of the examined 
institutions include local spending for 
goods and services, salaries and wages to 
local residents, and expenditures by guest 
artists and local and nonlocal audiences. 
Table VI- 3 presents selected data on insti- 
tutional direct effects during fiscal 1978, 

Local institutional expenditures for goods , 
services, and salaries . It is estimated 
that the examined institutions made 60 per- 
cent of their expenditures for goods and 
services with local vendors and that this 
totaled $940,226. The percentage of non- 
labor expenditures made locally by the ex- 
amined institutions ranged from 60 percent 
to 61 percent. An additional $1,485,402 
was spent for salaries and wages to local 
households. No estimate has been made of 
the impact of additional earned and other 
income by institutional employee house- 
holds, which in some instances was as high 
as 20 percent. 



Table VI-2 



San Antonio SMSA selected businesses related to arts and culture 



Businesses 



Number Employees Payroll 



Television-radio enterprises 

Music and record stores 

Bookstores 

Photography stores 

Movie theatres (except drive-ins) 



75 


396 


$3,481,000 


47 


286 


$1,698,000 


34 


121 


$ 663,000 


9 


63 


$ 386,000 


26 


431 


$1,901,000 



Total 



191 



1,297 



$8,129,000 



80 



Table VI-3 



San Antonio SMSA estimated direct economic effects of examined institutions 



Total 



Percent 
of total 
direct 
spending 



Single institution 
Lowest Highest 



Local institution expenditures 
for goods and services 

Employee salaries and wages 

Local audience spending (other 
than ticket price) 

Sole-reason visitor spending 

Guest artist spending 



$ 940,226 
$1,485,402 

$ 6 9 2,722 
$ 585,469 
$ 32,224 



25% 
40% 

19% 
16% 



$42,347 

$87,676 

$60,832 
$22,386 
$ 660 



$481,442 
$981,610 

$278,841 
$226,621 
$ 23,100 



Total 



$3,736,043 



100% 



*Less than 1 percent 



81 



Table VI-4 



San Antonio SMSA estimated audiences and spending by examined institutions 



Institution 



Audience 



Local 



Nonlocal 



Nonlocal 

(sole 

reason) 



Institution 
total 



Carver Cultural Center 
Museum of Transportation 
San Antonio Opera 
San Antonio Symphony 
Witte Museum 

Total 



36,121 
31,208 
13,026 
63,993 
134,058 

278,406 



2,719 

104,478 

3,674 

2,666 

75,407 

188,944 



699 
5,563 
2,756 

600 
6,074 

15,692 



38,840 

135,686 

16,700 

66,659 

209,465 

467,350 



82 



Audience spending 



Local 



Nonlocal 



Nonlocal 
(sole 
reason) 



$ 65,740 
S 76,772 
$ 60,832 
$210,537 
$278,841 



$ 236,950 

$ 9,104,858 

$ 320,175 

$ 232,332 

$ 6,571,432 



$ 26,080 
$207,556 
$102,826 
$ 22,386 
$226,621 



Guest artist spending . Each year, cultural 
institutions contract with nonresident 
designers, directors, conductors, featured 
soloists, touring groups, and others. These 
nonresident 'guest artists" were reported 
to have spent a total of $32,224 locally. 
No attempt has been made to estimate spend- 
ing by guest artist entourage. 



Audience spending. Decisions 



jgarding the 



handling of audience data can have a manor 
impact on economic effect estimates. This 
study's conservative approach was to in- 
clude the ancillary spending of nonlocal 
visitors only if attendance at the arts 
event was their sole reason for being in 
tne community. This protocol is discussed 
in Chapter I . 

At some institutions, however, sole-reason 
visitors are only a small percentage of 
total visitor attendance and spending. 
Many visitors indicated that they had 
planned ahead of time to attend although 
that was not the sole reason for their 
visit. Table VI-4 presents a summary of 
audience data for San Antonio. 

An estimated 188,944 visitors from outside 
the SMSA attended the examined institutions 
during fiscal 1978. They comprised from 
4.5 percent to 77.7 percent of total at- 
tendance depending on the institution. Of 
these visitors, 15,692 are estimated to 
have visited San Antonio specifically to 
attend the institutions under study. 



$692,722 



$16,465,747 



$585,469 



Table VI-5 



San Antonio SMSA audiences of examined institutions by residence and spending 



Audience residence 
In San Antonio 

Outside San Antonio but in SMSA 

Outside SMSA 



Average for 

all institutions 



Single institution range 
Lowest Highest 



39. 8% 
19. 8% 

40. 4% 



15.4% 
6.9% 
4.5% 



75.3% 
23.5% 
77.7% 



Audience spending 

Percent of local audience reporting 

Per capita spending 

Sole-reason nonlocal audience per 

capita spending 

Not sole-reason nonlocal audience 
per capita spending 



60.0% 
$ 2.49 

$37. 31 

$91.66 



45.0% 
$1.82 

* 

* 



95.0% 
$4.67 

* 

* 



*Due to small sample sizes, analysis of nonlocal audience 
data was not conducted by individual institutions. 



84 



As seen in Table "1-5, local audiences 
spent sums ranging from an average of $1.82 
to $4.67 per person per visit for items 
such as meals and parking. During fiscal 
1978, local audiences are conservatively 
estimated to have spent $692,722 over and 
above admission fees. 

As shown in Table VI-6 , many other visitors 
expected to attend while visiting San An- 
tonio, but it was not -heir sole reason. 
Visitors from outside the SMSA are of spe- 
cial interest inasmuch as their spending 
represents "new" dollars, money which had 
not been in the community until that time. 

Across all examined institutions, nonlocal 
sole-reason visitors traveled a mean of 
eighty-two miles and reported per capita 
expenditures of $37.31, resulting in total 
expenditures of $585,469 that can be con- 
servatively attributed to the drawing power 
of the examined cultural activities. Per- 
sons for whom attendance at the cultural 
institutions was not their sole reason "for 
visiting the community traveled a mean of 
eighty miles and spent $69.54 per capita, 
totaling $15,880,278. 



Table VI-6 



San Antonio SMSA nonlocal audiences by examined institutions 



Institution 





Nonlocal 


Proportion 


Proportion 


Audience 


proportion 


of nonlocal 


of nonlocal 


sample 


of total 


who expected 


who were 


size 


audience 


to attend 


sole-reason 


343 


6.8% 


45.0%* 


25.0%* 


131 


77.7% 


25.3% 


5.3% 


182 


21.1% 


91.7% 


75.0% 


705 


4.5% 


42.3%* 


23.1%* 


554 


36.9% 


40.9% 


8.1% 



Carver Cultural Center 
Museum of Transportation 
San Antonio Opera 
San Antonio Symphony 
Witte Museum 



♦Because of relatively small nonlocal audiences, 
these data should be treated with caution. 



85 



Table VI-7 



San Antonio SMSA 
estimated secondary 
economic effects 
of examined institutions 



Secondary business volume 
generated by institution- 
related direct effects 

Secondary personal incomes 
generated by institution- 
related direct effects 
(excluding $1,485,402 in 
salaries to organizational 
employees) 

Secondary full-time jobs 
in the St. Louis SMSA 
attributable to institution- 
related direct effects 
(excluding 61 full-time 
organizational employees) 

Initial expansion of the 
local credit base 

Current value of backup 
inventory, but not equip- 
ment and property 



$6,185, 327 



$2, 345,260 



347 



862,529 



$1,044,720 



Secondary economic effects 

Direct-effect spending leads to secondary 
effects when the institution-related expen- 
ditures within the community are in turn 
respent by local firms and households. The 
study estimates the level of five secondary 
effects of institution-related spending in 
1978. Respending of initial dollars intro- 
duced into the local economy is estimated 
to result in $6,185,327 in local secondary 
business volume. Of this amount, an esti- 
mated $2,345,260 is paid out in wages to 
employees. This personal income represents 
347 full-time jobs in the San Antonio SMSA. 

Additional secondary effects include an ex- 
pansion of the local credit base due to 
deposits in local banks by the examined 
institutions, their employees, and the 
local businesses benefiting from institu- 
tion-related direct effects. It is esti- 
mated that in fiscal 1978 average monthly 
balances in business and employee savings 
and checking accounts totaled $954,137. 
When reduced by federal and state cash re- 
serve requirements, this allows an initial 
expansion of the credit base totaling 
$862,529. 

Finally, area firms benefiting from insti- 
tution-related direct and secondary busi- 
ness activity are estimated to have inves- 
ted $1,044,720 in plant, inventory, and 
equipment in support of this business vol- 
ume. This represents the fiscal 1978 value 
of these assets, not expenditures made in 
fiscal 1978; a portion of the assets may, 
however, have been acquired in that year. 
Expenditures were not necessarily made wi.th 
local firms. Table VI-7 presents estimates 
for each of the secondary effects discussed 
above. 



Government revenues and expenditures 

In addition to estimating the direct and 
secondary effects on businesses and indi- 
viduals attributable to the examined in- 
stitutions, this study has sought to esti- 
mate the effect on local San Antonio gov- 
ernment revenues and expenditures , and the 
institutions they support, as seen in Table 
VI-8. 



86 



Table VI-8 



San Antonio SMSA examined institutions by sources of government support 



Institution 



Federal 



State 



Local 



Total 



Carver Cultural Center $ 12,900 

San Antonio Museum Association* S 87,000 
Symphony Society of San Antonio** $165,000 



S3, 840 



$ 



$155,520 
$470,000 
$181,500 



$ 172,260 
$ 557,000 
$ 346,500 



Total 



$264,900 



$3,840 



S807,020 



$1,075,760 



* (Includes Witte Museum and San Antonio Museum of Transportation.) 
** (Includes San Antonio Symphony and San Antonio Symphony Opera.) 



87 



Table VI-9 



San Antonio SMSA 
estimated revenues and costs 
to local government 
related to examined institutions 



Revenues 



Real estate taxes paid 
by the institutions, their 
employees , and business 
property serving them* 

Locally retained sales 
tax on institution- 
related business volume 

Local income tax revenues 
attributable to institu- 
tional employees 

State aid to local govern- 
ments attributable to 
institutional employee 
households 

Hotel taxes 

Taxes to local transit 
authority 

Parking revenues, estimated 



Total 



Costs 



Total 



$ 59,042 



$ 32,_2l! 



$ 15,074 

$ 6,120 

$ 5,762 

$ 7,867 



$126,083 



Operating costs of local 

governments and schools 

for services to employee 

households $ 52,729 

Direct appropriations to 

one institution $155,520 

Grants to study institutions $651,500 



$859, 749 



*Data unavailable for real estate taxes on 
business property servicing the institu- 
tions . 



Estimates of costs to local governments in 
the San Antonio area are based on estimates 
of local governmental operating costs as- 
sociated with services to employee house- 
holds, including the cost of public in- 
struction for households with children in 
the public schools, but excluding costs 
associated with services to the institu- 
tions themselves. Table VI-9 summarizes in- 
stitution-related governmental costs and 
revenues. Included as costs are local gov- 
ernmental grants and fees for services. 
In reviewing Table VI-9, the limited 
nature of this analysis should be kept in 
mind. No information is available by which 
tc judge whether or not the identified 
effects on business, individuals, and Gov- 
ernment are typical of the broader universe 
of San Antonio area cultural institutions. 
The tax effects shown are specific to the 
examined mix of institutions. 

Revenues to local government included real 
estate taxes paid by the institutions and 
their employees, income taxes, local hotel 
taxes, transit taxes, state aid to local 
governments, and parking revenues for a 
total of $126,083 in local government rev- 
enues attributable to the institutions. 
An employee survey indicates that employees 
at the examined institutions contribute to 
both costs and revenues of government. 
They live in the city of San Antonio or 
elsewhere in Bexar County, and approximately 
4 7 percent of employees are homeowners; 
they report a total of eighteen children in 
local public schools. 

Sales, income, and property tax estimates 
are undoubtedly conservative inasmuch as 
no estimate has been made of taxes paid by 
individuals benefiting from institution- 
related secondary effects. In addition, 
no attempt has been made to assess the in- 
cidental effects of institutional activities 
on surrounding taxable property values, 
which 'may be positive or negative. Finally, 
no attempt has been made to assess the govern- 
mental costs or benefits associated with 
the more subtle effects that may result 
from the arts, which are discussed in the 
overview. 

Costs to local government include operating 
costs of local governments and schools, 
local government grants, and direct appro- 
priations to the examined institutions for 
a total cost to local government of $859 , 749 . 
As noted earlier, this does not include ad- 
ditional costs that may be associated with 
specific governmental services to the ex- 
amined institutions. 



88 



CHAPTER VII 



THE SPRINGFIELD ECONOMY AND 
ARTS AND CULTURAL INSTITUTIONS 



Springfield 

Standard Metropolitan 

Statistical Area (SMSA) 



D 5 '0 '5 20 



The following institutions in the Spring- 
field Standard Metropolitan Statistical 
Area or SMSA were selected fcr study by 

Springboard : 

SDringfield Symphony Orchestra 
Springfield Theatre Guild 
SDringfield Art Association 
Springfield Ballet 
Art Collection, Illinois 

State Museum 
Old State Capitol 
Community Concert Series 
Springfield Municipal Opera 
old State Capitol Art Fair 
Great American People Show 

These represent a range of organizational 
types and include some of the more well- 
known local institutions. Their selection 
resulted from locally initiated efforts 
to identify interested organizations. 

The successful completion of the Spring- 
field project was due to the efforts of a 
number of persons, including the principal 
project staff at Springboard and the Center 
for the Study of Middle-Size Cities at 
Sangamon State University. Charles Kirch- 
ner, board member of Springboard, served 
as study director; Dr. Phillip Gregg of 
the Center was responsible for coordinating 
the day-to-day tasks; Dr. John 3owman, 
associate professor of economics at San- 
gamon State assisted; and Andi Rosenstein, 
a student in the University's Community 
Arts Management Program, was pro jeer ad- 
ministrative assistant. Other staff per- 
sons and volunteers are identified at the 
end of this report. 

Sprin gfield institutions 

Edwards Place was deeded to the Spring- 
field Art Association in 1913. Since 
then, it has functioned as an art gallery, 
museum, and art school. Later, a gallery 
was built adjoining the house and sepa- 
rate studios have also been constructed. 

The art association schedules over fifteen 
exhibits a year as well as offering art 
classes, workshops, lectures, and a vol- 
unteer art appreciation program in the 
public schools. 

The Springfield Ballet Company was formed 
in 1975 with the merger of the Copper Coin 
3allet Company, founded in 1957, and the 



UENARC 



SPRINGFIELD • 

SANGAMON 



Basefl on U S. Depl. ol Commerce. Bureau o' the Census. 
Current Population Reports. Series P-26 



Ballet Concert Group, founded in 1964 . The 
company produces dance performances and 
provides instructional programs in dance. 

The Great American People show was in- 



corporated in December 19' 



with a pri- 



mary purpose of creating new historical 
drama and presenting educational enter- 
tainment. 

The Springfield Municipal Opera became a 
not-for-profit corporation and produced 
its first show in 1950. The Muni Opera 
produces a series of amateur musical the- 
atre productions during the summer months . 

The Springfield Theatre Guild was in- 
corporated in November 19 47. In 1951 the 
guild's own theatre opened at 101 Lawrence 
Avenue. In 1967 the Paul Becker Hall was 
built to the west of the firsr building 
to provide additional facilities. The 
guild presents five amateur productions 
each season, as well as sponsoring workshops . 

The Springfield Community Concert Associa- 
tion has a long history, starting in 1902 
as the Springfield Amateur Musical Club. 
In 19 31 the club joined the Community Con- 
cert Association, a division of Columbia 
Artists Management, Inc. The association 



39 



Table VII-1 



Springfield SMSA demographics 



Age (19 77: 



Education (1970) 



13-24 
25-34 
35-49 
50 and over 



11.2% 

14. 5% 

15. 7% 
2 9.3% 



Less than 5 years 

4 years of high school or more 

4 years of college or more 



3.2% 
56.6% 
10.4% 



Median age 



31.5 



Median education 



12.2 



presents four concerts by notable artists 
each year. 

The Springfield Symphony Orchestra began 
performing in 1922, but its current artis- 
tic development can be traced to 1952 when 
Harry Farbman became conductor. The or- 
chestra's present schedule consists of five 
concerts a season. 

The Old Capitol Art Fair was initiated in 
1961 to bring visual artists and their 
work into Springfield, to provide an 
opportunity for area citizens to see and 
purchase quality art, and to develop a 
civic art collection. 

The Illinois State Museum was created in 
1877 by an act of the Illinois legisla- 
ture. In 1928, a few years after the 
museum moved into new quarters in the 
Centennial Building, Frances Ridgely was 
hired to develop the art department. The 
present structure was completed in 1963. 
The art department provides temporary ex- 
hibitions in addition to its permanent 
collection. The museum is an agency of 
the State of Illinois. 

The Old State Capitol is composed of the" 
Illinois State Historical Library, founded 
in 1889, and the Illinois State Historical 
Society, founded in 1899. The library is 
a state agency. 



Springfield economy and the broader 
cultural community 

An examination of the economy and broader 
cultural community of Springfield con- 
tributes to an understanding of the 
effects ascribed to the ten examined arts 
institutions. Table VII-1 presents useful 
market data such as the Effective Buying 
Income (EBI), a measure of the buying 
power of households after government deduc- 
tions for taxes, social insurance, and 
lesser items; it also shows income, age, 
education, and population information. 
The Springfield Standard Metropolitan 
Statistical Area or SMSA consists of the 
Illinois counties of Sangamon and Menard. 
In this study, the terms "local," "the 
Springfield metropolitan area," and "the 
Springfield region" are used interchange- 
ably to identify the Springfield SMSA, 
unless otherwise specified. Springfield, 
the capital of Illinois and the county 
seat of Sangamon County, is located 19 
miles southwest of Chicago and one hun- 
dred miles northeast of St. Louis. The 
city is one hundred miles north of the 
1970 center of population for the U.S. 
and twenty miles due west of the economic 
center, for the forty-eight contiguous 
states. 

Sangamon County had a 1975 population of 
180,514, up from 171,020 in" 1970 (County 



90 



FoDulation (selected years) 



Household income (1977 



1960 

1970 

1975 
1977 



146,539 S8,000-S9, 999 

171,020 $10,000-S14 ,999 

180,514 $15,000-524,999 

185,400 $25,000 and over 



6. 3% 
16. 8% 
33. 4% 
20. 7% 



Population change 
1960-1970 

1970-1975 



9.8% 
5.0% 



1977 median household income 

1969 median household income 

Average annual change in 
per capita income 1969-74 



$16 ,098 
310, 302 

b • o -5 



and City Data Book 1977 , U.S. Dept. of 
Commerce, Census Bureau). The Spring- 
field Chamber of Commerce projects that 
Springfield will surpass the national av- 
erage for per capita income by 1990 
(Springfield, Illinois — 1990, The Greater 
Springfield Chamber of Commerce) . 

Springfield was founded by settlers from 
North Carolina in 1818 and became the Il- 
linois state capitol six year's later. The 
city is well known as the home of Abraham 
Lincoln. 

Because Springfield is the state capitol, 
many people in the SMSA are government 
employees. State government and the 
service and clerical sectors provide 
the bulk of Springfield's employment. 

In 1977, the State of Illinois was the 
city's largest single employer with 16,150 
employees. Fiat Allis was second with 
2,900 workers. Hospitals and insurance 
companies dominated the remainder of the 
list of major employers, with St. John's 
Hospital employing 2,100, Memorial Medi- 
cal Center employing 1,800, and Franklin 
Life and Horace Mann Educators Insurance 
Companies both employing more than one 
thousand workers ( Financial Report: City 
of Springfield, Illinois: For Fiscal Year 
March 1, 1978 to Feb. 28, 1979 . City of 
Springfield, Financial Department) . 



Springfield is the retail trade center 
for the surrounding agricultural area of 
nearly ten counties with an estimated 
population of 400,000. Sangamon County has 
965 retail and 304 wholesale firms, and 
the county's 1977 retail sales approached 
$872,000,000. The major sales categories 
were machinery, farm products, groceries, 
and automotive equipment. Approximately 
71 percent of Sangamon County ' s commercial 
activity occurred in Springfield. In ad- 
dition, the city serves as headquarters 
for 125 national, regional, and state as- 
sociations, and eight insurance companies. 
Total business volume in the SMSA in 1978 
was estimated at $1,875,392,050 (Spring- 
field Chamber of Commerce , ad justed to 1978). 

Springfield is served by a major highway 
network, twenty-six major trucking firms, 
and five railroads. Two airlines, Ozark 
and Air Illinois, provide air service. 

Springfield's tourism and convention 
business is growing. Immediately east 
of the downtown business district is the 
nearly completed twenty million dollar 
Springfield Metropolitan Exposition and 
Auditorium Authority convention center. 
The Illinois State Fair, held in Spring- 
field each August, attracts nearly a mil- 
lion visitors. Abraham Lincoln's home and 
tomb as well as the nineteenth-century 
Illinois State Capitol are popular. 



91 



ballet, theatre, poetry workshops, music 
appreciation groups, choirs, bands, and 
the annua: Old Capito: Art Fair. Four 
colleges 1 universities are located in 
the Sprinc leld area. They are Sangamon 
State University, Lincoln Land Community 
College, Springfield College, and Southern 
Illinois University School of Medicine. 

The examined institutions were selected 
from the many nonprofit arts and cultural 
organizations in the Springfield SMSA. 
Althouah these ten may perhaps typify the 
impact of various types of institutions, 
they do not represent the full range of 
locally available commercial and nonprofit 
activities. It is clear that the examined 
institutions do not exhaust the impact of 
the "culture industry." The yellow pages 
of the Springfield metropolitan area tele- 
phone directory list over three hundred 
enterprises which can be considered culture- 
related in the broadest sense. These range 
from music, art, and theatrical suppliers 
to book and record dealers, design firms, 
and commercial photographers. 

Data on the impact of some elements of 
these cultural business sectors are avail- 
able from the 1977 statistics in the U.S. 
Bureau of the Census County Business Pat- 
terns series. Table VII-2 details various 
data on businesses used by the general 
public . 



Direct economic effects 

The direct economic effects of the exam- 
ined institutions include local spending 
for goods and services, salaries and wages 
to local residents, and expenditures by 
guest artists and by local and nonlocal 
audiences. Table VII-3 presents selected 
data on institutional direct effects dur- 
ing fiscal 1978. 

Local institutional expenditures for 
goods, services, and salaries . It is 
estimrued that the examined institutions 
made 49 percent of their expenditures for 
goods and services with local vendors and 
that this totaled $396,654. The percent- 
age of nonlabor expenditures made locally 
by the examined institutions ranged from 
18 percent to 100 percent. An additional 
$981,461 was spent for salaries and wages 
to local households. No estimate has 
been made of the impact of additional 
earned and other income by institutional 
employee households, which in some cases 
was over 3 5 percent. 

Guest artist spending . Each year, cul- 
tural institutions contract with nonresi- 
dent designers, directors, conductors, 
featured soloists, touring groups, and 
others. These nonresident "guest artists" 
were reported to have spent a total of 
$54,451 locally. No estimate has been made 
of spending by guest artist entourage. 



Table VII-2 



Springfield SMSA selected businesses related to arts and culture 



Businesses 



Number Employees Payroll 



Television-radio enterprises 

Music and record stores 

Bookstores 

Photography stores 

Movie theatres (except dfive-ins) 



16 


105 


$ 


816,000 


9 


58 


$ 


380,000 


16 


101 


$ 
$ 
$ 


351,000 


7 


80 


235,000 



Total 



48 



344 



$1,782,000 



92 



Table VII-3 



Springfield SMSA estimated direct economic effects of examined institutions 



Tota: 



Percent 
of total 
direct 
spending 



Single institution 
Lowest Highest 



Local institution expenditures 
for goods and services 

Employee salaries and wages 

Local audience spending (other 
than ticket price) 

Sole-reason visitor spending 

Guest artist spending 



$ 396,654 


13% 


$5,020 


$167,914 


S 981,461 


33% 


$ 240 


$892,527 


S 431,526 


14% 


$4,421 


$134,460 


$1,133,737 


38% 


$2,261 


$728,488 


$ 54,451 


2% 


$ 


$ 40,000 



Total 



$2,997,819 



100% 



93 



Table VII-4 



Springfield SMSA estimated audiences and spending by examined institutions 



Institution 



Audience 



Local 



Nonlocal 



Nonlocal 

(sole 

reason) 



Institution 
total 



Art Collection, 
Illinois State Museum 

Community Concert Series 

Great American People Show 

Old State Capitol Art Fair 

Old State Capitol 

Springfield Art Association 

Springfield Ballet 

Springfield Municipal Opera 

Springfield Symphony Orchestra 

Springfield Theatre Guild 



81,000 


69,000 


15 


,900 


150,000 


4 ,019 


41 




12 


4,060 


10,655 


108 




32 


10,763 


23,250 


1,750 




625 


25,000 


32,653 


139,204 


32 


,653 ' 


171,857 


13,950 


1,050 




375 


15,000 


3, 704 


236 




134 


3,940 


13,388 


553 




377 


13,946 


6,768 


282 




190 


7,050 


7,564 


1,231 




519 


8,795 



Total 



196,951 



213,460 



50,817 



410,411 



94 



Audience spending 



Local 


Nonlocal 


Nonlocal 

(sole 

reason) 


$ 4,421 


$ 




2,261 


$ 


268 


$ 11,721 


$ 




5,956 


$ 


714 


$134,400 


$ 


3, 


.805,390 


$ 


354,729 


$ 82,305 


$ 




96,514 


$ 


13,944 


$ 87,510 


$ 


7, 


,677,101 


$ 


728,488 


$ 49,383 


$ 




57,908 


$ 


8,366 


$ 6,075 


$ 




13,016 


$ 


2,990 


$ 18,877 


$ 




30,774 


$ 





$ 9,543 


$ 




15,553 


$ 


4,239 


$ 27,231 


$ 




67,891 


$ 


11,578 


$431,466 


$11, 


.772,364 


$1, 


,125,316 



Audience spending . Decisions regarding 
the handling of audience data can have a 
major impact on economic effect estimates. 
This study's conservative approach was to 
include the ancillary spending of nonlocal 
visitors only if attendance at the arts 
event was their sole reason for being in 
the community. This protocol is discussed 
in Chapter I . 

At some institutions, however, sole- 
reason visitors are only a small percent- 
age of total visitor attendance and 
spending. Many visitors indicated that 
they had planned ahead of time to attend 
although that was not the sole reason for 
their visit. Table VII-4 presents a summary 
of audience data for Springfield. 

An estimated 213,460 visitors from out- 
side the SMSA attended the examined in- 
stitutions during fiscal 1978. They 
comprised from 1.1 percent to 80.7 per- 
cent of total attendance depending on the 
institution. Of these visitors, 50,817 
are estimated to have visited Springfield 
specifically to attend the institutions 
under study. 



95 



Table VII-5 



Springfield SMSA audiences of examined institutions by residence and spending 



Average for 

all institutions 



Single institution range 
Lowest Highest 



Audience residence 
In Springfield 

Outside Springfield but in SMSA 

Outside SMSA 



37.2% 
10. 8% 
5 2.0% 



11.9% 


83.4% 


7.5% 


28.6% 


1.1% 


80.7% 



Audience spending 

Percent of local audience reporting 

Per capita spending 

Sole-reason nonlocal audience per 
capita spending 

Not sole-reason nonlocal audience 
per capita spending 



40.0% 
$ 2.19 

$22. 31 

$65. 37 



33.0% 
$1.10 

* 

* 



65.0% 
$3.60 

* 

* 



*Due to small sample sizes, analysis of nonlocal audience 
data was not conducted by individual institutions. 



96 



As can be seen from Table VII-5, local au- 
diences spent sums ranging from an average 
of $1.10 to $3.69 per person per visit for 
items such as meals and parking. During 
fiscal 1978, local audiences are conser- 
vatively estimated to have spent $431,526 
over and above admission fees. 

As shown in Table VII-6 , many other visitors 
expected to attend while visiting Spring- 
field, but it was not their sole reason. 
Visitors from outside the SMSA are of 
special interest inasmuch as their spend- 
ing represents "new" dollars, money which 
had not been in the community until that 
time. Across all examined institutions, 
nonlocal sole-reason visitors traveled a 
mean of seventy-two miles and reported per 
capita expenditures of $22.31, resulting 
in total expenditures of $1,133,727 that 
can be conservatively attributed to the 
drawina power of the examined cultural 
activities. Persons for whom attendance 
at the cultural institutions was not their 
sole reason for visiting the community 
traveled a mean of eighty-seven miles and 
spent $69.54 per capita, for a total of 
$10,631,972. One reason for this difference 
in expenditures is that in the sole-reason 
group 32 percent stayed at hotels for a 



mean of 0.70 nights, whereas in the non- 
sole-reason group 38 percent stayed at 
hotels for a mean of 1.74 nights. 



Table VII-6 



Springfield SMSA nonlocal audiences by examined institutions 



Institution 



Audience 

sample 

size 



Nonlocal 
proportion 
of total 
audience 



Proportion Proportion 

of nonlocal of nonlocal 

who expected who were 

to attend sole-reason 



Art Collection, 
Illinois State Museum 

Community Concert Series 

Old State Capitol 

Springfield Art Association 

Springfield Ballet 

Springfield Symphony Orchestra 

Springfield Theatre Guild 



282 


46. 5% 


364 


1.1% 


307 


80. 7% 


381 


6. 7% 


261 


6. 6% 


365 


3. 8% 


331 


14. 3% 



56.6% 
66.7%* 

67.4% 
45.5%* 
78.6%* 
91. 7%* 
75.6% 



*Because of relatively small nonlocal audience, 
these data should be treated with caution. 



23.0% 

33.3%* 

23.5% 

36.4%* 

57.1%* 

66.7%* 

42.2% 



97 



Table VII-7 



Springfield SMSA 
estimated secondary 
economic effects 
of examined institutions 



Secondarv economic effects 



Secondary business volume 
generated by institution- 
related direct effects 

Secondary personal incomes 
generated by institution- 
related direct effects 
(excluding $981,461 in 
salaries to organizational 
employees ) 

Secondary full-time jobs 
in the Springfield SMSA 
attributable to institution- 
related direct effects 
(excluding 72 full-time 
organizational employees) 

Initial expansion of the 
local credit base 

Current value of backup 
inventory, equipment, 
and property 



$3, 223,0^1 



$1, 316,946 



161 



$ 901,705 



$1,643,852 



Direct-effect s 
effects when th 
ditures within 
respent by loca 
study estimates 
effects of inst 
1978. Respendi 
duced into the 
to result in $3 
business volume 
mated $1,316,94 
employees. Thi 
161 full-time j 



pending leads to secondary 
e institution-related expen- 
the community are in turn 
1 firms and households . The 

the level of five secondary 
itution-related spending in 
ng of initial dollars intro- 
local economy is estimated 
,223,011 in local secondary 
Of this amount, an esti- 
6 is paid out in wages to 
s personal income represents 
obs in the Springfield SMSA. 



ary effects include an ex- 
cal credit base due to 
banks by the examined 
ir employees, and the 
benefiting from institu- 
ct effects. It is esti- 
cal 1978 average monthly 
ess and employee savings 
unts totaled $929,607. 
ederal and state cash re- 
s, this allows an initial 
credit base totaling 



Finally, area firms benefiting from insti- 
tution-related direct and secondary busi- 
ness activity are estimated to have inves- 
ted $1,643,852 in plant, inventory, and 
equipment in support of this business vol- 
ume. This represent the fiscal 1978 value 
of these assets , not expenditures made in 
fiscal 1978; a portion of the assets may, 
however, have been acquired in that year. 
Expenditures were not necessarily made 
with local firms. Table VII-7 presents 
estimates for each of the secondary ef- 
fects discussed above. 



Additional second 


pansion of the lo 


deposits in local 


institutions, the 


local businesses 


tion-related dire 


mated that in fis 


balances in busin 


and checking acco 


When reduced by f 


serve requirement 


expansion of the 


$901,705. 



Government revenues and expenditures 

In addition to estimating the direct and 
secondary effects on businesses and indi- 
viduals attributable to the examined 
institutions, this study has sought to esti- 
mate the effect on local Springfield gov- 
ernment revenues and expenditures in fiscal 
1978 of institution support; this is de- 
tailed in Table VII-8. Research on the im- 
plication of economic impact data for re- 
gional cost-sharing of arts and cultural 
institutions by the several units of gov- 
ernment that comprise a metropolitan area 
can be found in David Cwi's "Regional Cost- 
Sharing of Arts and Cutlural Institutions," 
Northeast Regional Science Review, Vol. 9, 
1979. 



98 



Table VII-8 



Springfield SMSA examined institutions by sources of government support 



Institution 



Federal 



State 



SMSA 



Total 



Art Collection, 
Illinois State Museum 

Community Concert Series 
Great American People Show- 
Old State Capitol Art Fair 
Old State Capitol 
Springfield Art Association 
Springfield Ballet 
Springfield Municipal Opera 
Springfield Symphony Orchestra 
Springfield Theatre Guild 



$ --- 
$ --- 
$ — 
$ --- 

$51,455 


$ 
$ 
$ 

$ 
$1 


151,580 


$ 
$ 
$ 
$ 

$ 




$ 
$ 
S 

$ 
$1 


151,580 


21 , 30 


1,250 


22,550 


,289,500 





, 340,955 


$ — 


$ 


750 


$ 





$ 


750 


$ - — 


$ 





$ 


400 


$ 


400 


$ — 


$ 





$22,000 


$ 


22,000 


$ --- 


$ 


4 ,000 


$ 





$ 


4,000 


$ — 


$ 





$ 





$ 






Total 



$51,455 



$1,467,130 



$23,650 



$1,542,235 



99 



Table VII-9 



Springfield SMSA 
estimated revenues and costs 
to local government 
related to examined institutions 



Revenues 



Real estate taxes paid 
by institutions, their 
employees, and business 
property serving them 

Locally retained sales 
tax on institution- 
related business volume 

Local income tax revenues 
attributable to institu- 
tional employees 

State aid to local govern- 
ments attributable to 
institutional employee 
households 

Hotel taxes 

Gasoline tax 

Parking revenues, estimated 



Total 



Costs 



Operating costs of local 
governments and schools 
for services to employee 
households 

Grants to study institutions 



Total 



$107,664 



$ 19,085 



$ 24,473 

$ 5,956 

$ 12,059 

$ 18,344 



$187,581 



$ 87,217 
$ 23,650 



$110,867 



Estimates of costs to local governments 
in the Springfield area are based on esti- 
mates of local governmental operating 
costs associated with services to employee 
households, including the cost of public 
instruction for households with children 
in the public schools but excluding costs 
associated with services to the institu- 
tions themselves. Table VII-9 summarizes 
institution-related governmental costs and 
revenues. Included as costs are local 
government grants and fees for services . 
In reviewing Table V T I-9, the limited 
nature of our analysis should be kept in 
mind. No information is available by 
which to judge whether or not the identi- 
fied effects on business, individuals, and 
government are typical of the broader uni- 
verse of Springfield area cultural institu- 
tions. The tax effects shown are specific 
to the examined mix of institutions. 



Revenues to 1 
estate taxes , 
devoted to se 
sales taxes, 
taxes , state 
and parking r 
$187,581 in 1 
tributable to 



ocal government include real 

taxes on business property 
rvicing the institutions, 
local hotel taxes , gasoline 
aid to local governments, 
evenues. These totaled 
ocal government revenues at- 
the examined institutions. 



An employee survey indicates that employees 
at the examined institutions contribute 
to both costs and revenues of government. 
They live mainly in the city of Spring- 
field or elsewhere in Sangamon County, 
but 11 percent live in Macon County, 
which is not part of the Springfield 
SMSA. Approximately 62 percent of 
employees pay taxes as homeowners; they 
report a total of forty-two children in 
local public schools. 

Sales, income, and property tax estimates 
are undoubtedly conservative inasmuch as 
no estimate has been made of taxes paid 
by individuals benefiting from institu- 
tion-related secondary effects. In addi- 
tion, no attempt has been made to assess 
the incidental effects of institutional 
activities on surrounding taxable prop- 
erty values, which may be positive or 
negative. Finally, no attempt has been 
made to assess the governmental costs or 
benefits associated with the more subtle 
effects that may result from the arts 
which are discussed in the overview. 



Costs to local government included operat- 
ing costs of local governments and schools 
and local government grants to the exam- 
ined institutions for a total cost to 
local government of $110,867. As noted 
earlier, this does not include additional 
costs that may be associated with speci- 
fic governmental services to the examined 
institutions. 



100 



ACKNOWLEDGMENTS (provided by study 
coordinator in each ciry) 



COLUMBUS 

Greater Columbus Arts Council : Everett H. 

isociation for the Per- 



Krueoer 



iambus 



forming Arts: Rowland C. Brown, David Ellis , 
Don Streioig Columbus Symphony Orchestra : 
Eleanor A. Gelpi, Thomas Langevm, Darrel 
Edwards, Susan Rosens tock Players Theatre 
of Columbus : Jules Garei, Ed Graczyk Col - 
-' Art: John W. Kessler, Budd 



omous 



iseum o: 



H. Bishop, James Buchanan, Herbert W . Moore 
3allet Metropolitan : LaVetta Helser, Harvey 
Roth, Jack Kamer Center of Science and In - 
dustry: Walter English, S.N. Hallock II, 
Polly Spence, William C. Schnitt, Tom Davis 
Assisting agencies and individuals : City 
of Columbus (Tom Moody;; Columbus Area 
Chamber of Commerce (Alfred Dietzel, James 
Thomas) ; Columbus Foundation (Daniel Gal- 
breath, Joseph Imberman) ; Mid-Ohio Regional 
Planning Commission (William C. Habig, 
James W. McPherson III) ; Ohio Department 
of Taxation (Ron Hohman, Marcia Glick, 
Tima Bozzuto) 



MINNEAPOLIS/ST. PAUL 

Children's Theatre Company : Richard H. Jack- 
son, John Clark Donahue, Jay Bush Chimera 
Theatre : Gloria Segal, James Borland 
Cricket Theatre : Preston Townley, Bill 
Semans, Marcy Dowse Guthrie Theatre : Don- 
ald Dwight, William George, Donald Schoen- 
baum, Donald Michaelis Minneapolis Soci - 
ety of Fine Arts (governing and supporting 
organization of the Minneapolis Institute 
of Arts) : David McGlaughlin, JohnM. Dozier, 
James V. Toscano, DeCourcy Mcintosh Min - 
neapolis Institute of Arts : Samuel Sachs II, 
Ruth Humleker, Timothy Fiske Minnesota 
Dance Theatre : Philip Getts , Loyce Hculton , 
Beverly Cnare Semon Minnesota Orchestral 
Association : Stephen R. Pflaum, Richard M. 
Cisek, Richard Bass, JohnG. Fischer, Anne 
Cheney St. Paul Chamber Orchestra : Eugene 
M. Warlich, Thomas Gerdom Science Museum 
of Minnesota: John Roe, Wendell A. Moray 
Walker Art Center : Alice E. Wittenberg, 
Martin Friedman, Donald Bcrrman, Robert 
Sain Metropolitan Council : Rey Boezi, 
Roger Israel, Sara Burstein, Victor Ward 
Twin Cities Metropolitan Arts Alliance : 
Donald Michaelis, Marcy Dowse, Doug Eichten, 
Thomas Kigin, Dixon Bond, Ted Crawford, 
Leigh Kamman, Karla Williams , Ronald Olson, 
Libby Larsen, Elizabeth Hinz , M.E.G. Roy 



ST. LOUIS 

Arts and Education Council o: 



Frank, Ann Des Rosiers, Joyce Volker , 
Christy Beckmann, Jerry Kvasnicka, Angie 
Gross, Joe Divito, Stephen Jay, Jane Childs , 
Michael Christopher , Peter Raven, Rick Daley , 
Susan Flowers , Tom Warner , Barbara Jennings , 
James Wood, Susan Sullivan , Joan Bernstein , 
Ronald Sutherland, Donald Fraziers , Julie 
Hershey, Rich Hugerman , Peggy Hilpest 
Consultants: Mark Twain 3ancshares 



SALT LAKE CITY 
Utah Arts Council: 



-rlev Curl 



)onnie Jo 



M. Hepworth , Lloyd Bliss, Carol Browning, 
Gail Delia Plana, Jo Ann Freed, Mrs. Jack 
Goodman, Edward L. Hart, Daniel L. Martino, 
Ronald L. Molen, Dennis Smith, waiter G. 
Smith, Twain Tippetts , Kathryn Wilson, Lynn 
Smith-Buckland Pioneer Memorial Theatre : 
Kenneth J. Burton Ballet West : Robert G. 
Bradford Salt Lake Art Center : Allen Dod- 
worth Tiffany's Attic : James Lewis Reper- 
tory Dance Theatre : Barry Bonifas Utah 
Symphony : Shir I K. Swenson Theatre 13S : 
Ariel Ballif Utah Museum of Fine Arts : 
E. Frank Sanguinetti, Josephine Theodore 
Ririe-Woodbury Dance Company : Sandra Cum- 
minos Utah Ocera Company : Rob Mickelson 



Other participants : University of Utah 
Bureau of Economic and Business Research 

(Thayne Robson, Frank Hachman) ; Department 
of Development Services, State of Utah 

(J. Phillip Keene) ; Utah State Budget Of- 
fice (Jed Kee) ; Salt Lake Council for the 
Arts (Margaret Smoot) ; Division of Indus- 
trial Promotion (Dale Carpenter) ; Community 
Development (Beth Jarman) ; Institute of 
Arts -Administration , University of Utah 

(Don S. Anderson); Four Corners Regional 
Commission; Utah State Division of Indus- 
trial Promotion; Utah Travel Council; Utah 
State Board of Education; Utah State Tax 
Commission; Utah Foundation; Wasatch Re- 
gional Planning Commission; Salt Lake Area 
Chamber of Commerce; Salt Lake County Coun- 
cil of Governments 



SAN ANTONIO 

Arts Council cf San Antonio : Bernard Lif- 
shutz , David Mumm, Michael Laquey Carver 
Cultural Center: Jo Long San Antonio Mu - 
seum Association: Nancy Negley, Adair 
Sutherland, Philip Bauman Symphony Socier; 



-p^ir-}r>o>-- 



Greater St 



Ben Greene, Dick Gass, Pat Masc: 



SPRINGFIELD 

Project steerinq committee: Donald Bigger- 
staf f , Nancy Evans , Dave Kiliman, Berna- 
dette Nolan, Bob Wesley Other project 
staf : 



at the Center for the Study of 



„s: Donald Brandon, John Peters McCarthy , Middle-Size Cities : Ramin Ben-ash, John W. 
Clarence Barksdale, Stanley Richman Par- Foley, Daniel Johnson, Jan Kohl, Kathy 
ticipants a t target institutions : David Landahl, Kathy Oglesby, Sue Ann Schleder , 

Julie Slack, Ken Stanek , Kathy Wooldridge 
Participating organizations and designates: 



Hyslop, Arthur Dye, Nancy Von Breck, Davi 



i H 



101 



Springfield Symphony Orchestra ( Irwin Muncy); 
Springfield Theatre Guild (Mina Halliday) ; 
Springfield Art Association (Pauline Tel- 
ford, William Bealmer); Old Capitol Art 
Fair (Bernard Arrnbruster) ; Springfield Com- 
munity Concerts (Mrs. Walter Stehman) ; 
Springfield Ballet Company (Mrs. Charles 
Wabner) ; Illinois State Museum (Robert 
Evans); Illinois State Historical Library 
(William Alderfer, Olive Foster); Spring- 
field Muni Opera, 1977-78 (Clark Denton III); 
Springfield Muni Opera, 1978-79 (Richard 
DeFend) ; Springfield Symphony Orchestra 
(James Graham, Hans Anker) Audience study 
volunteers : Don Biggerstaff, Ed Giganti , 
Sharon Brown, Andi Rosenstein, Roberta 
Volkmann, Ron Keener, Linda Shiffer, John 
Ryerson, Cordelia Burpee, Will Stonehocker, 
Nancy Gregg, Darlene Nordland, Marion Rich- 
ter, Duanne Dickerson, Marian Levin, Gene 
Rubley, State Arts Agency volunteers, 
Kevin Brown, Jack McKee, Barb Bums, Olive 
Foster, William Bealmer, Christina Fenner , 
Irene Barker, Caitlin Evans, Irwin Muncy, 
Mrs. Walter Stehman, Bud Luers, Chuck 
Janasek, William Alderfer, Carl Volkmann, 
Bob Swenson, Nancy Evans, Joe Hills, Phil 
Gregg, Molly D'Esposito, Linda Speece, 
Judy DeBoldt, Linda Stonehocker, Erin Big- 
gerstaff, Wilma Higgins, Cynthia Posegate, 
Martha Hills, Vera Lee Williams, Lynda 
Thompson, Jonathan Katz , Jim Bennie, Fred 
Speece, Andrea McFadden, June McKee, Bill 
See, Bob Evans, JoAnn Gross, Charles Kirch- 
ner, Mary Beth Roland, Pauline Telford, 
Bonnie Wabner, Elaine Mack, Jane Luers, 
Bonnie Janasek, Hans Anker 



102 



REPORTS IN THE NATIONAL ENDOWMENT FOR 
THE ARTS RESEARCH DIVISION SERIES 



Since 197 6 the Researcn Division of p the 
National Endowment for the Arts has Jpeen 
studying matters of interest to the arts 
community and issuing reports based on its 
findings. Copies of the reports may be or- 
dered from the Publishing Center for Cul- 
tural Resources, 6 25 Broadway, New York 
City 10012 at the prices noted below. 

Checks should be made payable to "Publish- 
ing Center." Prices include postage and 
handling; no stare or local sales tax is 
applicable . 



#14 Audience Development: An Examination 
Of Selecred Analysis and Prediction Tech- 
niques Applied to Symphony and Theatre 
Attendance in Four Southern Cities. 4 8 
pages. January 1981. ISBN 0-89062-097-0 
S2.50 

=15 Economic Impact of Arts and Cultural 
Institutions: Case Studies in Columbus, 
Minneapolis/St. Paul, St. Louis, Salt Lake 
City, San Antonio, and Springfield. 102 
pages. January 1981. ISBN 0-89062-106-3 
$3.50 



#1 Employment and Unemployment of Artists: 
1970-1975. 32 pages. April 1976. $2.50 

#2 To Survey American Crafts: A Planning 
Study. 32 pages. July 1977. $2.50 

#3 Understanding the Employment of Actors. 
36 pages. September 1977. $2.00 

#4 Arts and Cultural Programs on Radio and 
Television. 92 pages. September 1977 . $3.50 

#5 Where Artists Live: 1970. 80 pages. 
Dctober 1977. $3.00 

#6 Economic Impact of Arts and Cultural 
Institutions: A Model for Assessment and 

Case Study in Baltimore. 96 pages. 
November 1977. $3,50 

±7 Minorities and Women in the Arts: 1970. 
3 2 pages. January 197 8. $2.50 

+8 The State Arts Agencies in 1974: All 
Present and Accounted For. 160 pages. 
\pril 1978. $4.50 

t9 Audience Studies of the Performing 
irts and Museums: A Critical Review. 106 
sages. November 1978. S3. 00 

rlO Self -Employment , Migration, and House- 
lold and Family Characteristics of Artists : 
L973. 32 pages. November 1978. S2.00 

'11 Conditions and Needs of the Profes- 
sional American Theatre. 120 pages. Jan- 
uary 1980. ISBN 0-89062-076-8 S4.50 

'12 Artists Compared by Age, Sex, and 
Earnings in 1970 and 1976. 54 pages. 
January 1980. ISBN 0-39062-077-6^ $2.50 

fl3 Craft Artist Membership Organizations 
L978. 48 pages. January 1981. ISBN 
)-89062-089-X $2.50 



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